Share Forum - Discuss JSE shares and join the Investor Challenge

I dabbled in CFD in about 2005/2006 and then stopped - the reason being that they are short term contracts and as such SARS then saw this as trading. If you are categorized as a trader then SARS treat profits as income and you are tax accordingly, and if you really do well (ha ha) you could fall into the super bracket taxpayer. Also when I engaged with SARS to understand the ramifications of being a categorized as a trader you would have great difficulty convincing them that you could be a trader and an investor at the same time . I also raised the question of partitioning a portfolio into 2 components "trading" and "investing" - investing you have to hold the shares for 3 years to be categorized as an investor. When we had the crash 2007/2008 I sold out much of my portfolio some in time others not so lucky - but I still kept my status as an investor. Another "trick" I learnt was that you buy a sizeable parcel of shares and you trade within this parcel based on the shares volatility but tax year to tax year your holdings stay at the original purchase. However over the ears I have stopped doing this because my stockbroker now sends comprehensive documentation to SARS and their investigators will (if you are on their radar) interrogate your transactions on the transaction listing report.
One type of share dealings that seems to have either disappeared or doesn't seem popular anymore is installment shares. In 2005 and 2006 I built up my share portfolio this way - you bought x number of shares in a company (at trading prices) but only paid 55% up front the balance you could defer for one year - this gave you the opportunity to see the direction of the shares - if increasing in price you paid at the original agreed price and could then sell at the higher current price and make a small profit or large profit if it took off. Haven't checked lately whether they are still available though
Be very wary with SSF's and CFD's - in about 2006 I lost some R35 k in the space of 2 days so it really is gambling at the high end and as all casinos know the tables are loaded against the gambler   

Futures trading such as SSF's, CFD's and FX at margin is not taxable in many countries such as the UK as it is considered as gambling. What about SA?

Not sure if I am reading this right - but spread betting is not taxed, but CFDs are taxed in the UK.

The main difference is the way they are treated for tax– spread bets are free from capital gains tax in the UK *, while CFDs are not. CFD trading is not tax free in the UK, while spread betting is. CFD equity trades ask for a commission – spread bets on shares do not.

you have a link? Everywhere I look says the above?

cheers Orca - everwhere else say differently. Like the tax free nature of spreadbetting but they seem to be for day trading only as the close at the end of the day and need to be rolled over and as I am more a swing trader, CFDs make more sense.

What's your view on the ZAR/USD?

I reckon it gonna strengthen again after the hoohaa over our Reserve Bank being nationalised blows over.

Man the casualties on JSE is getting bad, APN, BLU, EOH and ELB

Oh - the list is much longer than these few:-
Off my portfolio alone;
ADI, CML, DCP, IPL, L4L, RFG, RFL, SYG,  - all 20% or more down on original purchase price.
My view is that politics is getting in the way of good business practices and having a major depressing effect on the economy, and the ability of business to function in such negative environs.
Hardly a day goes by where we don't hear some or other depressing economic story, looting by politicians or interference in the lives of South African, and yet the landscape is littered with thieving, fraud and wholesale treasonable acts and yet nobody goes to jail for their crimes.
Sad state of affairs indeed