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Edited version of private advice
Authorisation Number: 1051691720272
Date of advice: 12 June 2020
Ruling
Subject: Am I in business - option trading - income v capital
Question
Are you carrying on an options trading business?
Answer
Yes. Having regard to your circumstances and the relevant factors contained in Taxation Ruling TR 97/11 you are carrying on a business. Further information about carrying on a business can be found by searching 'QC 31733' on ato.gov.au
This ruling applies for the following periods
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commenced on
1 July 20XX
Relevant facts and circumstances
You have X years experience working as a trader as well as university qualifications in relevant fields.
You have taken extended unpaid leave from your employment and do not plan to return.
You work a minimum of X hours a day researching various markets and the trends associated with these markets.
You have invested a significant amount of funds into the activity.
You traded on a regular and frequent basis.
Your strategy revolves around generating income in the short term not for long term investment, using derivatives to trade on shares with a much larger face value than your actual investment.
You trade on both sides of the market (long and short).
You entered this activity with the intention of doing it full-time, and this is still your intent. However, due to current market conditions you have not been trading with the same frequency and you are looking for new opportunities in the market.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 8-1