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Edited version of private advice
Authorisation Number: 1051767286125
Date of advice: 25 November 2020
Ruling
Subject: Am I in business
Question
Does your activity amount to the carrying on of a business?
Answer
Yes. You meet the relevant factors contained in Taxation Ruling TR 97/11. 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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You commenced buying and selling shares in 20xx.
You regularly research stock markets by using magazines, newspapers and internet sites.
You conduct your share trading through 'A' brokers. You also use custom built software to interface their API daily to place trades, assess position values and rebalance your portfolio.
You have home computer and iPad which you use for research and trading.
You initially contributed $X of your own funds.
You also deposit approximately $Y per month.
You will continue in invest in your share trading portfolio and continue to increase your activity.
You currently have a net asset value of $X.
You also use margin loans. The total amount including margin loans is $Y.
You currently trade U.S S&P 100 equities only and intend to do so for the foreseeable future. These U.S stocks provide exposure to low volatility and high liquidity, characteristics which you view as favourable.
The main trading that you utilise is a short term mean reversion strategy.
You also implement a volatility trend trading system, which accounts for around XX percent of total portfolio.
You hold the shares for short periods of time, usually less than one month.
You generally spend Y hours per week on your share trading activities
You generally buy shares in volatile and high risk sectors to realise short term gains.
You are engaged in full time employment.
You are also studying for a Bachelor degree and are taking some courses relevant to share trading.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Section 102-5
Income Tax Assessment Act 1997 Section 102-10