Tradman Posted October 31, 2017 Report Share Posted October 31, 2017 Hi Everybody. I have a 2 part question. Firstly I live in SA and have a forex brokerage account in Australia and trade currency. This is my sole source of income. I would like to know if I need to pay SARS for the profit I make in that account or just what I draw from(into my FNB account) it to live.(This is what I've been doing until now). If I must pay CGT on the profit in the account, must I still pay tax on what I draw to live? Secondly, If I emigrate to Australia, the exact same question as above applies. Thank you for your time and responses in advance. Quote Link to comment Share on other sites More sharing options...
VenomZA Posted October 31, 2017 Report Share Posted October 31, 2017 (edited) Hi @Tradman Im not a tax expert but ill give my 5 cents. Since it is your sole source of income and since you are trading FOREX you`re probably trading rather actively therefore its not regarded as investments, in SA you will be taxed under the income tax act (personal income tax). and NOT CGT. You will need to submit a tax return and treat your gains as income once its earned I believe (one you sell your FOREX contracts and transfer). You can check out the tax tables in the below link: http://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Rates of Tax for Individuals.aspx As for Australia, I only started the process now, so I have no idea. As I stated I`m not a tax consultant, so I would suggest you rather consult an expert. Edited October 31, 2017 by VenomZA Quote Link to comment Share on other sites More sharing options...
Tradman Posted October 31, 2017 Author Report Share Posted October 31, 2017 Thanks Venom Quote Link to comment Share on other sites More sharing options...
ottg Posted October 31, 2017 Report Share Posted October 31, 2017 (edited) As said by @VenomZAYou pay income tax at your marginal tax rate on all income earnings as a professional trader. All expenses you made as a professional trader, in order to earn an income, you can deduct as an expense to lower your tax base. The cost of the contracts (seen as trading stock) is also seen as an expense to the business. If you liquidate the asset (Forex contract portfolio) and there is a capital gain then you pay capital gains tax. CGT is lower than personal income tax rate. In RSA and Australia its the same except that the tax rates are different You pay tax in the country where you are resident. https://www.moneysmart.gov.au/managing-your-money/income-tax https://www.ato.gov.au/Individuals/Income-and-deductions/Income-you-must-declare/ A tax consultant should answer this part: If you immigrate but your forex brokerage account & portfolio is already in Australia, thus you not going to sell any assets how will the SA Reserve Bank view that when you financial immigrate? https://www.ato.gov.au/general/capital-gains-tax/international-issues/changing-residency/ Edited October 31, 2017 by ottg Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted November 1, 2017 Report Share Posted November 1, 2017 Agree with above responses, it will be normal income not CGT; classification similar in both countries. You should include realised profit not only money taken to RSA / out of trading account - as soon as you 'banked' the profit then it is taxable. If you move to Australia then it will be taxable here and not in RSA - as noted by OTTG keep track of deductions. You will probably have to consider whether you are required to register for GST - I have not looked at this. Once here you may be a dual tax resident and have to declare to SARS etc but that is another story. Who do you hold the brokerage account with and is it 24/7 trading? Quote Link to comment Share on other sites More sharing options...
RYLC Posted November 3, 2017 Report Share Posted November 3, 2017 Here is an Ebook on tax on trading specifically for Australia written by a lawyer / tax accountant who also worked for the tax department. He's based in Perth and seems to know his stuff based on asset protection, tax and business / investment courses I have done over the years. https://www.wealthsafe.com.au/wp-content/uploads/2014/11/The-Tax-Intelligent-Traders-Manual.pdf Quote Link to comment Share on other sites More sharing options...
RYLC Posted November 3, 2017 Report Share Posted November 3, 2017 Oh and no need to register for GST (covered in the book) because financial transactions are "input taxed" meaning no GST payable or claimable. Quote Link to comment Share on other sites More sharing options...
ottg Posted November 3, 2017 Report Share Posted November 3, 2017 Very handy Ebook. Thx @RYLC 1 Quote Link to comment Share on other sites More sharing options...
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