If a trading agent trades in Forex on my behalf, using money in my trading account held with the trading agent the trading agent having sole authority and responsibility for trading the investment in that account , will my profits be subject to Capital Gains Tax or Income tax? And when would tax be due - every tax year, or only upon withdrawal from that trading account?
I am otherwise a salaried employee in an unrelated industry, and do not trade myself, this money being an investment. Many thanks. Hi, As you are not trading yourself, the trades themselves would be subject to Capital Gains Tax. CG - Foreign currency: introduction Thank you. Thank you very much, your guidance much appreciated. But can you also confirm if I would be due to pay said Capital Gains Tax on the profits arising each year in my Self Assessment submission , or, only when I withdraw from the trading account the trading agent having sole authority and responsibility for trading the investment in that account, whilst the money remains in that account?
Thanks again. Hi, The capital gains or losses arise on each transaction carried out by your agent. The relevant financial service laws are used to regulate the industry so as to ensure that all participants are protected. As such, Forex trading is classified as assessable income for tax purposes. While there are no specific rules that have been set for Forex trading, the regulations for stock markets are the ones applied.
However, there is a Forex trading Tax, which is meant for non-residents in Australia who have a source of income in the country. If you are a foreigner and wish to trade through a local broker in Australia, you will be expected to pay tax on the profits made. You will only be expected to pay taxes if you have made profits within the tax assessment year.
Retail trading is a part of Forex trading and as such there are other tax rules which are applied. In the Forex market, the prices keep fluctuating and as such, there are profits and losses made. The tax rules are applied to the losses or gains which are realized for your trade. From these indications, it is possible that the Forex gains and losses can be considered capital gains.
For the CGT to be applied the trades need to be held for more than a year. The tax computation may appear to be complicated but our experts are here to help you with the best services. Talk to us and we will help you beat the tax deadline.
Would you like to speak to one of our tax advisers? Just submit your details and we'll be in touch soon. Are Forex Trading Profits Taxable? Contact Us.
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