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Edited version of private ruling
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Ruling
Subject: Contracts for differences
Question:
Are losses incurred trading in contacts for differences (CFDs) subject to the non-commercial loss provisions contained in Division 35 of the Income Tax Assessment Act 1997 (ITAA 1997) where the activities do not amount to the carrying on of a business?
Answer:
No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
You have traded in CFDs throughout the year and have incurred losses.
You have stated that you are not carrying on a business of CFDs trading and this ruling has been provided on that basis.
Relevant legislative provisions
Income Tax Assessment Act 1997 - Division 35.
Reasons for decision
The non-commercial loss provisions contained in Division 35 of the ITAA 1997 are to prevent losses of individuals from non-commercial business activities being offset against other assessable income in the year the loss is incurred. This Division is not intended to apply to activities that do not constitute carrying on a business (Subsection 35-5(2) of the ITAA 1997).
In your case, you have stated that you are not carrying on a business of CFDs trading, therefore, the non-commercial loss provisions in Division 35 of the ITAA 1997 do not apply to the losses incurred.