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Originally Posted by N Rothschild you need to make money in order to be taxed. If spread betting is a secondary income then it is the most tax efficient way of trading, if it becomes your main income, CFD trading is much more tax efficient. The outcome of entirely speculative, gambling or betting activity is that profits from it are usually not taxable. Contact HMRC for details. If you withdraw and elect Section tax treatment, the loss can be carried forward for use against future capital gains. Spread betting losses cannot be declared for tax relief purposes as spread betting is classed as gambling.

Jun 16,  · Re: uk tax laws on forex. Simple answer yes check out this link, forex trading is considered to be the same as trading shares. You put your capital at risk make a profit and we tax that profit. If you make a loss then that loss is deductable against any other capital gain.

Tax Classifications

Doesnt seem to be much on the Community Links Members List. Jun 6, , Doesnt seem to be much on the net. The following members like this post: Originally Posted by N Rothschild.

Jun 6, , 1: Simple answer yes check out this link, forex trading is considered to be the same as trading shares. You put your capital at risk make a profit and we tax that profit. If you make a loss then that loss is deductable against any other capital gain. My best advice is get an accountant. Jun 6, , 3: Sod the accountant - it's pretty darn simple If you speculate on forex non spreadbet and make money then you can be taxed on that in the form of CGT. This scenario assumes that your speculation on forex is not your sole source of income and that you pay some Income Tax via a job of some kind.

If forex trading became your sole income then the IR will most likely look at your situation differently. In that situation you would be better off registering as a self employed financial trader.

You would then just produce a profit and loss account just as you would for any business which you were running. This is very simple and you'd be classed as a 'Sole Tradership'.

This would allow you to make significant deductions for expenses like a room in your house for use as an office as well as computer equipment, software, data fees, electricity and internet fees.

You would then be assessed for Income Tax on your net profits. Personally I'd suggest spreadbetting as a consideration.

I'm no expert on tax advice but I know a hell of a lot of successful traders who make large sums spreadbetting and pay no tax whatsoever. You can certainly control risk to a higher degree with the firms which offer the best stop loss filling policies in fast markets.

How much are you planning on making and will this be your sole income? Hope this helps, Steve. Do you need to pay tax on CFD trading profits? How do I declare and pay Capital Gains Tax? You will need to file an annual Capital Gains Tax return. This is usually best done online. Contact HMRC for further details. CFD trading is more tax efficient than traditional Forex trading trading through an ECN broker and can be the most tax efficient way to trade depending on how much you are making and if trading is your primary source of income.

Another advantage to CFD trading is that losses can be declared in order to claim tax relief. As I understand it if I trade with a Forex Broker then my profits optimist!

Nov 14, , 6: As you develop your forex trading system, use the demo accounts that many trade brokers provide. Nov 18, , 8: Spread betting is not tax free if you are classified as a trader by the inland revenue. To 'earn' this classification you would be surprised how few regular trades it takes. I don't believe the IR can call betting trading when they have made the legal distinction of classifying spread betting as betting. On what grounds do you state this? So, how many 'trades' does it take - or is this just hearsay and guessing?

I've been trading for over 10 years and never genuinely heard of spread betting being taxed - only second and third hand reports with no proof. The IR themselves state it's tax free and that's surely not dependent on 'degree'. Nov 18, , Whether its full time or part time its gambling and its not reportable or taxable. The reason is that there are way more losers than winners, millions of pounds are lost, if the IR started taxing the winners they would have to allow the losers to offset there losses and claim tax back, thats how it works with other investments.

If it was the other way round and most people were making a tax free fortune from SB the government would move the goalposts, change the law and start taxing the majority of winners!

uk tax laws on forex

Mar 16,  · The UK is one of a handful of tax residences that permit this, including Australia if I am not mistaken. Profits from a normal trading account are to be declared as earnings and will attract tax at the normal scales, as I have it. Forex trading tax laws in the UK are in line with rules around other instruments, despite you buying and selling foreign currency. However, if you remain unsure about tax laws surrounding your specific instrument, seek professional tax advice. UK Forex gains – a taxing time?! Posted on: June 26, by: One of the areas of Forex trading that I find novices are somewhat confused about is the tax treatment of gains or losses made from trading Forex .