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Sorry, first line should have read: If you are a daytrader then...

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bellenuit

645 Posts.

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10/10/18

19:22

Post #: 36073689
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Originally posted by bellenuit ↑

If you are a daytrader then you would not be charged GST as your trading profits are treated as income, not capital gains.

If you trade under a discretionary trust then the same will apply to the trust, the trading profits would be treated as income to the trust. However, with a trust you can stream that income to the trusts beneficiaries and it will be taxed at their marginal rates. That would only make sense if 1) there are other beneficiaries and 2) they are on marginal tax rates less than you are on.

I think there are special rules related to children as beneficiaries and that is outside my sphere of knowledge.

If you are on a high marginal tax rate then a company structure has some advantages. It is only taxed at 30%, or 27.5% if certain conditions are met. So if you keep your profits in the company and don't distribute to yourself via dividends, you will have more trading capital to work with. However to access the company profits you need to pay yourself dividends and these will be taxed at your marginal rate.

Other considerations for trusts and companies are set-up costs, accountancy fees and in the case of companies an annual ASIC fee (about $270 or so).

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Sorry, first line should have read: If you are a daytrader then you would not be charged CGT as your trading profits are treated as income, not capital gains.
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