Tax and CFDs - is income on withdrawal or at trade execution? Australia

Question

I wonder if for tax purposes, is income realised when funds are withdrawn into a bank account or when a profitable position has been closed?

From what I understand so far, it is probably the latter. The terms 'revenue account' is in use here: https://community.ato.gov.au/t5/Personal-tax-questions/CFD-taxation-on-gains-and-losses/td-p/4458

I see references to this URL, which I have not been able to access http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR200515/NAT/ATO/00001

Any help or pointers to official information appreciated :)

Answer 1

In Australia, profits and losses from CFD trading are not considered capital gains or losses. You make a profit or loss whenever you close a trade. If you transfer money in or out of your trading account it has nothing to do with your profit or loss relating to trading and as such are not taxable.

You simply would simply total up all your profit trades (minus brokerage, financing, and other fees) and enter the total at Item 24 in your Tax Return. You then do the same thing with all you loss trades, add them all up (add on to them your brokerage, financing and other fees associated with those trades) and enter the total figure at Item D15.

Answer 2

There are two separate issues here. Realised vs Distributed, Revenue Gain vs Capital Gain. The two links that you linked mainly concerns Revenue Gain vs Capital Gain.

In both Revenue Gain and Capital Gain:

Note that this only applies to a loss you get from disposing of investments – not where you have made a 'paper loss' on investments you continue to hold. For tax purposes, a loss isn't a loss until it is realised.

https://www.ato.gov.au/General/Capital-gains-tax/Shares,-units-and-similar-investments/Capital-losses-on-shares-and-units/

The disposal event is the act of closing the CFD or letting it expire. I don't see how "withdrawn into a bank account" has any relevancy in individual taxation.

If you formed a company, and signed up a CFD account using that company, then the treatment might be slightly different, still the company itself still experienced the "disposal event".