Gambling Losses Tax Deductible Australia
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Gambling Losses Tax Deductible Australia Tax
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For instance, if you lose $3,000 on one trip to the casino and win $2,100 on another trip in the same year, you can write off $2,100 in losses to offset the $2,100 in winnings, leaving you with a total of $900 of taxable gambling income. Losses are allowed as an itemized deduction dollar for dollar against the gain. Gambling losses cannot be greater than gambling wins for the tax year. Example: John wins $23,500 during the year playing slots and other casino games. His gambling losses are $37,900.
Does anyone know much about financial spread betting?
You more or less bet on the direction of a share price or index. IG determines the spread. IG has many markets and method built around it. IG Index's site for spread betting
http://www.igindex.com.au/content/index.html
PAY NO TAX?
The main advantage is supposed to be that you don't pay tax but that is controversial. I asked for a PDS but they didn't send me one.
Here's an article from The Australian explaining how it works
http://www.theaustralian.news.com.au/common/story_page/0,5744,10019882%5E643,00.html
The attraction is that you don't pay tax on your winnings but the ATO had made a ruling saying that it was assessable income. IG and the taxpayer involved plan to appeal it and litigate the matter if required but I have not found any cases.
Apparently the NSW gambling industry is not too happy about it as it would mean more competition.
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From the PDS:
http://www.igindex.com.au/content/files/IGI_PDS1.pdf
6.2 Betting profits and losses
General position
Ordinarily gains from gambling or wagering transactions are not
assessable (nor are losses deductible) for Australian income tax or capital
gains purposes, but the tax treatment may differ depending on your
personal circumstances, for example if your trading is done in the course
of carrying on a business. Factors that may be taken into account in
deciding if a taxpayer is carrying on a business include whether the
gambling is conducted in a systematic, organised and businesslike way,
the volume and size of the gambling, whether the gambling is related to,
or part of, other activities of a businesslike character,whether the form of
gambling is likely to reward skill or judgment or depend largely on chance
and whether the taxpayer is gambling principally for profit or for pleasure.
We are aware that the ATO has issued a private ruling under which it has
ruled, in respect of the individual seeking the ruling, that the winnings
were assessable as income and as a capital gain on the basis, amongst
other things, that entering into a spread bet is so likely to reward skill and
judgement and so commercial in nature that winnings will be assessable
income, even if it is accepted that the bet is gambling, is not made in the
course of carrying on a business and is an isolated transaction.We
disagree with the ATO’s ruling.The individual who has received the ruling
has informed us that they will be objecting against the ruling, and that if
they do not receive a satisfactory response, they (in conjunction with us)
will pursue the matter as a test case through the court system, to establish
a judicial ruling on whether winnings are assessable income and losses are
allowable deductions.
The above is a summary only and should not be relied upon as being
applicable to your own circumstances. If you require further information,
you may wish to consult the ATO.
Consult your tax adviser
We strongly recommend that you consult your own tax adviser before
deciding to open an account and enter into any Spread Betting transactions.
----
If anyone has any views or experience on this I'm sure all us keen 'punters' would be glad to hear it. I'm really attracted to the idea of not paying tax!
The info above is only how I see it, as I normally just stick to simple transactions I may have got something wrong so let me know.
You more or less bet on the direction of a share price or index. IG determines the spread. IG has many markets and method built around it. IG Index's site for spread betting
http://www.igindex.com.au/content/index.html
PAY NO TAX?
The main advantage is supposed to be that you don't pay tax but that is controversial. I asked for a PDS but they didn't send me one.
Here's an article from The Australian explaining how it works
http://www.theaustralian.news.com.au/common/story_page/0,5744,10019882%5E643,00.html
The attraction is that you don't pay tax on your winnings but the ATO had made a ruling saying that it was assessable income. IG and the taxpayer involved plan to appeal it and litigate the matter if required but I have not found any cases.
Apparently the NSW gambling industry is not too happy about it as it would mean more competition.
------
From the PDS:
http://www.igindex.com.au/content/files/IGI_PDS1.pdf
6.2 Betting profits and losses
General position
Ordinarily gains from gambling or wagering transactions are not
assessable (nor are losses deductible) for Australian income tax or capital
gains purposes, but the tax treatment may differ depending on your
personal circumstances, for example if your trading is done in the course
of carrying on a business. Factors that may be taken into account in
deciding if a taxpayer is carrying on a business include whether the
gambling is conducted in a systematic, organised and businesslike way,
the volume and size of the gambling, whether the gambling is related to,
or part of, other activities of a businesslike character,whether the form of
gambling is likely to reward skill or judgment or depend largely on chance
and whether the taxpayer is gambling principally for profit or for pleasure.
We are aware that the ATO has issued a private ruling under which it has
ruled, in respect of the individual seeking the ruling, that the winnings
were assessable as income and as a capital gain on the basis, amongst
other things, that entering into a spread bet is so likely to reward skill and
judgement and so commercial in nature that winnings will be assessable
income, even if it is accepted that the bet is gambling, is not made in the
course of carrying on a business and is an isolated transaction.We
disagree with the ATO’s ruling.The individual who has received the ruling
has informed us that they will be objecting against the ruling, and that if
they do not receive a satisfactory response, they (in conjunction with us)
will pursue the matter as a test case through the court system, to establish
a judicial ruling on whether winnings are assessable income and losses are
allowable deductions.
The above is a summary only and should not be relied upon as being
applicable to your own circumstances. If you require further information,
you may wish to consult the ATO.
Consult your tax adviser
We strongly recommend that you consult your own tax adviser before
deciding to open an account and enter into any Spread Betting transactions.
----
If anyone has any views or experience on this I'm sure all us keen 'punters' would be glad to hear it. I'm really attracted to the idea of not paying tax!
The info above is only how I see it, as I normally just stick to simple transactions I may have got something wrong so let me know.
Date of effect
This topic has effect to controlled private trusts and controlled private companies from 1 January 2002.
Summary
This topic contains information on:
- allowable deductions, and
- non-allowable deductions.
Gambling Losses Tax Deductible Australia 2020
Allowable deductions
Allowable deductions from the business income of a private trust or private company are as follows:
- expenses:
- incurred while earning taxable income, OR
- necessary for the conduct of a business with the purpose of earning taxable income,
- depreciation:
- allowed on plant and equipment actually used, or ready to be used, in producing assessable income,
- NOT allowed on plant and equipment which ONLY provides an external environment for the income producing activity,
- superannuation deductions paid to a complying superannuation fund (as per SIS),
- interest of no more than 10% p.a. paid in respect to GENUINE non-commercial loans,
- rent or mortgage interest, when business is conducted from the income support recipient's home,
- a deduction is allowed from the gross income, ONLY for rent or mortgage interest on the portion of the premises actually involved in conducting the business, and
- environmental impact assessments.
Act reference:SSAct section 7(2) An Australian resident is…
Non-allowable deductions
Non-allowable deductions from the business income of a private trust or private company are as follows:
- prior year losses ITAA,
- offsetting losses from unrelated businesses,
- building depreciation,
- borrowing expenses (ITAA sections 67 and 67A),
- contributions to non-complying (as per SIS) superannuation funds,
- donations (ITAA section 78(1)(a)),
- income equalisation deposits/farm management bonds (ITAA sections 159GA - 159GDA),
- double wool clip (ITAA section 26BA),
- forced disposal of livestock (ITAA sections 36AAA or 36(3)(7)),
- trading stock valuation adjustments (ITAA section 28),
- premiums for personal life insurance policies or funds,
- private health insurance premiums,
- obsolescence (ITAA section 31(2)),
- industry concessions/incentives,
- amortisation of intangible assets,
- provisions to defer taxation,
- capital expenditure deductions,
- entertainment, and
- deductions for research and development.
Gambling Losses Tax Deductible Australia Income Tax
For the legal authority and a complete list of the non-allowable deductions, please see the Disallowable Instrument, Social Security (Attribution of Income - Ineligible Deductions) Determination 2017.
Act reference:SSAct section 7(2) An Australian resident is…, section 1208B Permissible reductions of business and investment income