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More profit betting or trading?
Would you say you make more profit straight out betting or trading?
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betting ... If I want to trade I can trade the share market.
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Technically trading betfair also requires you to pay tax as it is no longer a form of gambling. Chrome Prince went into it a while back and if the tax office decided to follow up on your technique and they found you to be trading you would be required to pay tax on the profit. Trading is not a form of gambling. For instance : ------------------------ A recent decision by the Australian Tax Office (ATO) has cast doubt on whether the profits of spread betting are free from income tax. Spread betting involves placing a bet with a licensed bookmaker that a stock or commodity will rise or fall in value. It does not involve the purchase of the stock or commodity but is a 'wagering contract'. The profits of spread betting (if any) are gambling winnings and are exempt from income tax. On 12 March 2010, the ATO published interpretive Decision 2010/56, in which it determined that the proceeds of spread betting were taxable income. The ATO emphasised that, in Australia. spread betting is governed by a separate statutory regime from other gambling activities. The ATO stated that “transacting with financial spread betting is closer to the skill end of the chance-to-skill spectrum and the commercial and of the private/recreation-to-commercial spectrum than a bet on horse racing. The winnings tend to be rewards for skill and judgment rather than purely betting on chance.‘ The taxpayer, the ATO found, was engaged in a taxable business. --------------------- The important part of this is "The winnings tend to be rewards for skill and judgment rather than purely betting on chance." The ATO could say trading is a skill and the winnings are rewards for reading the market which is the same as trading the share market. In reality though your probably not going to have to pay tax. |
Trading is still gambling as you're never gaurenteed to make money. You are just assuming or hoping you're lay bet will get matched. After you place a back bet there's no gaurentee your lay bet will be matched to lock in a profit, hence it's actually gambling and not a 'sure thing'.
Is there something in writing on the official ATO website where it says betfair trading requires tax to be paid? Quote:
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Pat, in saying that there is no gaurantee that your lay bet will be matched, there is also no gaurantee that the individual spread betting will be profitable either. It's the fact that if you demonstrate to continually be matched over a period of time at a profitable margin in high dollar amounts that would determine whether your at the skill/commercial or chance/recreational end of the spectrum.
However I agree that its highly unlikely anyone would have to pay tax but at the same time UB has a point that there really isn't much stopping the ATO targetting someone making a living via sports/racing trading. |
I've been advised by the ATO twice over the phone that no tax needs to be paid on winnings. If you're a business you are eligible to pay tax on profits. If there's something on the ATO website that clearly states tax needs to be paid on profits, then I'd like to read up on it.
In saying all this, who honestly would declare profits from gambling? I have read about pro millionaire gamblers being targeted by the ATO but not small time punters. Quote:
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I think your missing what were saying a little bit Pat. Myself and UB haven't said that it will happen, were just saying its not out of the realm of possibilities if you trade a significant amount profitably over an extended period of time that eventually questions may be asked.
Anyhow i'll leave it at that :) |
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Pat,
I would say there is 99.9999% chance the ATO won't come after you for trading on the horses. Its all theoretical. It was raised a few years ago and has lingered on since then as a possibility. If you search google for "Australian Tax Office betfair" you might find a few things. as well as "ATO Tax Betfair" Here is a link to a guy who got asked about his punting just this year : http://community.betfair.com/austra...taxation-office There are a few threads on this forum from a few years ago. There are also a few on the betfair forums. and make sure you read this: http://law.ato.gov.au/atolaw/view.h...5/NAT/ATO/00001 |
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