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particularly as supposedly not subject to capital gains tax(unless its used as hedge).

No ruling from the tax office that I'm aware of but it's a fine line,

But not everyone is convinced that the Australian Tax Office will see it that way.

JEFF LEES, TAX LAWYER, DIBBS BARKER GOSLING: If you're really going into it for the purpose of saying, "I'll take my chance, I'll see what I can get," for pure pleasure, then it's a true gamble.

But if there's no chance element, or the chance element is taken out of it, then it can be a business activity and it can be profitable.

KAREN PERCY: Tax lawyer Jeff Lees says because IG Index provides detailed handbooks and advice and because clients can effectively cancel their bets, their transactions are more like futures trading than gambling and could be taxed accordingly.

This is the same as betting against a bookie at the races he/they control the bet, the income is cashflow to reduce risk on his/their payout sheet.Bookies set the market based on their considerable knowledge of the horses form etc, then as they recieve bets they ajust their odds/risk up or down depending on potential payouts & hedge money on holding bets if needed to further reduce risk.
My first thought is that the advantage is much more in IG's favour with this setup as they are likley to be holding money much longer than bookies do so thats a big advantage to them. I'm interested anyway & will see about those comparisions.

KAREN PERCY: Here's basically how it works. If you wanted to bet on the ASX 200 index based on yesterday's close, IG Index would quote you a spread, with a bid of perhaps 3,075 points and an offer of 3,080 points.

If you think the market will gain, you'd make an up bet from the offer level, wagering, say $10, for every point it moves.

If the market does go higher, then you will win $10 for every point it gains. If the index falls, you lose $10 for every point


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