Hi Christianp ... my understanding and context is thus ...See...

Hi Christianp ... my understanding and context is thus ...

See Definition Rule:
15. A financial contract for differences is a CGT asset under section 108-5 of the ITAA 1997.

16. On the maturity or close out of a financial contract for differences, CGT event C2 happens (section 104-25 of the ITAA 1997).

Gains/Losses arising from CFD's:
11. A gain from a financial contract for differences will be assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) where the transaction is entered into as an ordinary incident of carrying on a business, or where the profit was obtained in a business operation or commercial transaction for the purpose of profit making.

12. A loss from a financial contract for differences will be an allowable deduction under section 8-1 of the ITAA 1997 where the transaction is entered into as an ordinary incident of carrying on a business or in a business operation or commercial transaction for the purpose of profit making.

13. A gain from a financial contract for differences will be assessable income under section 15-15 of the ITAA 1997 where a taxpayer enters into a financial contract for differences in carrying on or carrying out a profit-making undertaking or scheme, and the gain from it is not assessable under section 6-5 of the ITAA 1997.

14. A loss from a financial contract for differences where the gain would have been assessable under section 15-15 of the ITAA 1997 is an allowable deduction pursuant to section 25-40 of the ITAA 1997.

Result: Gains/Losses will be treated thus:
53. Pursuant to section 118-20 of the ITAA 1997, to the extent that a gain on a financial contract for differences as a result of a CGT event is assessable under section 6-5 or section 15-15, a capital gain arising from the event is reduced.

54. Pursuant to subsection 110-55(4) of the ITAA 1997, to the extent that a loss on a financial contract for differences is deductible under section 8-1 or section 25-40, the reduced cost base of the asset is reduced thereby reducing the amount of capital loss.


Cheers ... tight stops.


This is only my view ... read the red stuff.