Tax on futures

Hi guys,

What is the law in relation to taxation on futures capital gains in Australia?

I understand in the US, unlike with stocks, you do not need to keep track of gains/losses and the net result, as you receive a form of "income statement" towards tax time which states your net result for the financial year.

I also read they have a 60/40 rule, whereby you get 60% of gains taxed like a longer term stock holding and only pay the higher bracket on 40%. For example, 50% tax discount on 60% of futures gains and full capital gains adjusted for your marginal tax rate on 40%?

Is it a similar set-up in Australia? Favouring futures traders in both time spent on compiling this information at tax time and on net results (lower taxation).

Cheers

See linked PDF

http://www.asx.com.au/investor/pdf/taxation_futures_dec_03.pdf

I trade futures extensively and from what i now/assume, tax is payable on any capitol gain made, i only trade short term but would imagine long term positions able to claim the 50% discount wouldn't apply to futures trading as you would only be holding positions in the forward contract month and be rolling long term positions at least 3 or 4 times year and in affect realising capitol gain/loss each time.

I should however say i hand my monthly statements to my accountant who has quite a few full time traders of different markets he takes care of it from there, i just pay his bill and the tax office when he tells me too

Depending on your volumes its worth trading as a business or trust and claiming back GST from brokerage, distributing profits to family members etc.

As with anything to do with Tax issues, speak to an accountant as everyones situation is different.

Pager said:

I trade futures extensively and from what i now/assume, tax is payable on any capitol gain made, i only trade short term

Click to expand...

In that case you shouldn't be paying capital gains tax. Your trading is 'carrying out a business' and therefore should be set up as such.

julius said:

See linked PDF

http://www.asx.com.au/investor/pdf/taxation_futures_dec_03.pdf

Click to expand...

Thanks

Trembling Hand said:

In that case you shouldn't be paying capital gains tax. Your trading is 'carrying out a business' and therefore should be set up as such.

Click to expand...

One of the advantages of being in New Zealand - no capital gains tax.

Rockhoundnz said:

One of the advantages of being in New Zealand - no capital gains tax.

Click to expand...

Sorry, but I'm in Oz and don't pay capital gains.