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Edited version of private advice
Authorisation Number: 1051960600934
Date of advice: 17 March 2022
Ruling
Subject: Am I in business of share trading
Question
Are you carrying on the business of share trading?
Answer
Yes.
It is accepted that the share trading activity has significant commercial purpose or character, that there is repetition and regularity of the activity, that it is planned, organised and carried on in a business-like manner and that the size scale and permanency of the activity together indicate that you are carrying on a business of share trading.
Further information about carrying on a business can be found by searching 'QC 31733' and 'QC 66047'on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You commenced your share trading activity during the year ended 20XX.
You have produced a detailed business plan for your income procuring activity where you stated that based on several market indicators that you believed that the market conditions were favourable to begin trading and that the opportunities outweighed the risks and was likely to produce a profit.
You use an online multinational broker to execute your trades.
You invested your own capital to allow you to start this share trading activity.
Over the course of the income year, you made hundreds of trades.
You kept daily records of trades in a spreadsheet to assist you in efficiently tracking your funds and liquidity and to assist you in your market analysis.
You have a home office where you conduct your share trading activity with a computer and multiple screens to assist you in timely stock analysis.
You spent approximately 2-4 hours a day Monday to Friday directly on your trading activity and an additional 2-3 hours per day researching stocks and options on weekends. This is approximately 14-30 hours per 7-day week.
You have a Bachelor of Commerce which forms the foundation of your trading knowledge.
You performed multiple analysis techniques to assist in making trades.
You are employed full time in an unrelated role.
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 995-1