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RE: [sharechat] Option Trading

From: "Baa Baa" <>
Date: Mon, 19 Apr 2004 12:04:29 +0000


I'm no expert, so check with your accountant, and possibly a specialist in 
international tax law/treaties, however, depending on volume of trades ... 
and assuming you'll do a lot in the options space, you will be exposed to 
being a 'trader' in the IRD definition, so perhaps best to align with a 
business model so you can accrue expenses (and losses - heaven forbid) 
against income/gains. Conversely, income/gains will be taxed at company (or 
international company) rates.

Remember, it's always the best policy to pay your taxes, whether it's 
locally or offshore, but pay them, and be happy with the diifference. 
Evasion is for idiots, and invites scrutiny few, if any, can withstand or 
would want. Avoidance is for the fence sitter that risks judgement either 
way, but tax minimisation is for the well advised, and the domain of any 
whom choose to pay for the advice. Just be sure the advice is proven, and 
ask, or demand that proof.

FWIW, Options are the only thing my company has exposure to in the capacity 
of investing, due purely to volume of trades, and they're all offshore, so 
under various tax treaties and treatments. My bullion and stocks are very 
low volume and generally only purchases, so treated as personal investments. 
I have robust accounting and -always pay my taxes- accordingly. Be a good 

Pay your dues and the IRD will leave you alone, because it's good for them 
to do so -ergo the tax revenues from your knowledge, participation and 
success are accruing to the country. You earn the country additional income 
from your successes and -you- (your business, which pays you 
dividends/drawings) earn additional income less taxes too. If it all turns 
to custard, the model allows you to accrue losses against (all) incomes and 
perhaps reduce your overall tax exposure.

Again, seek professonal advice from a qualified accountant, preferrably one 
who has clients who trade options. Ask the question about having a business 
trust owning the business that does the trading. Covoluted, but distancing 
your personal self from the mechanism of trading might be right for you.

OTY, there's no generic answer. It's what works best for you. If you don't 
know, get professional advice. Be prepared to pay for the best advice you 
can get.

>Subject: [sharechat] Option Trading
>Date: Sun, 18 Apr 2004 23:37:17 GMT
>Hi guys,
>I am just setting up an option trading account and was wondering if its
>better to set it up under a company name or under my name. I guess I am
>using the reference from property investments where we set up a LAQC. Does
>the Option or Share scenario have any tax effective criteria like in
>property. And I will trading in Australian Options for now.
>All suggestions will be much appreciated.
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