Trading as a Sole Trader

To do trading as a sole trader in Australia, you’re essentially treating your trading activity (shares, forex, crypto, etc.) as a business — not a hobby or passive investing. This means the ATO will treat your profits as income, and you’ll be able to claim business-related expenses.

✅ Steps to Start Trading as a Sole Trader

1. Decide if You’re a Trader or Investor

The ATO will only consider you a “trader” (business) if you meet certain criteria:

You trade frequently and consistently
You have a structured system or plan
You commit significant time and effort
You intend to generate income

🔹 Occasional buying/selling = Investor
🔹 Daily or systematic trading = Trader (Business)

2. Register as a Sole Trader

You need to make it official:

Step	How
🆔 Get an ABN	Apply at abr.gov.au
📛 Optional: Business name	Register if you want to use a name other than your own
🧾 TFN	Use your personal TFN (you don’t need a separate one)

3. Set Up Bank and Accounting

Open a separate bank account for trading income/expenses
Use accounting software (like Xero, QuickBooks, or Excel) to track:
- Trading profits/losses
- Internet, subscriptions, data feeds, software
- Home office expenses
- Hardware (laptop, monitor)

4. Keep Trading Records

ATO requires you to keep:

All trades (buy/sell dates, prices, platforms)
Invoices or statements from brokers
Expense receipts
Time logs (for parental leave or business proof)

5. Declare Business Income

In your tax return:

Select “Sole trader”
Report business income (not capital gains)
Claim eligible business deductions
Pay tax at individual marginal rates

6. GST – Usually Not Required

GST only applies to services/sales, not share or asset trading
You likely don’t need to register unless earning money from services

7. Optional: Business Insurance

You might consider business insurance, especially if working from home
Not required by law for traders, but useful in some cases

🔍 Real Example

You do	ATO sees you as	Tax Outcome
Trade US stocks 4–5 days/week	Sole trader (business)	Report business income
Use TradingView, data feeds	Claim expenses	Deduct from taxable income
Make $80,000 net profit	Taxed like personal income	No CGT discount, but expenses deductible