Pandemic DAY TRADING surges …but don’t give away your profits to the tax man! - Finness Advisory

Pandemic DAY TRADING surges …but don’t give away your profits to the tax man!

The share market has risen 35% in the past 12 months so anyone who’s owned shares has enjoyed the meteoric rise.  The volatility in the market has brought out the day traders in droves.

Too many traders don’t consider the tax effects of their actions whilst at the same time bragging about the gross returns.  But those returns can be heavily impacted by the frictional costs of transactions and taxes.

Remember if you own an asset for less than 12 months the full gain will be added to your taxable income for the financial year in which the sale occurred.   If you own an asset for greater than 12 months, you get the benefit of a 50% capital gains tax discount.

The gain is therefore halved and then the residual is added to your taxable income for the financial year of sale. Receiving this discount can have a massive impact on your net results.

Importantly, you need a good understanding of your overall tax position before you embark on investing so you fully understand the impact of your actions.

Many day-traders lack the understanding of their overall tax situation and thus give away much of their gains to the tax man for bragging rights of gross gains. This can be expensive.

Don’t give away your cash gains!

For more information on capital gains, call me on 0449 083 740 or simply complete a few details below and I’ll do the rest.

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