Tax on Profits: Cap Gains or Income?

ihateregistering

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I am thinking of doing a little futures trading on the side. I wont be day trading, probably holding positions for a few months or more.

Does anyone know. If I make money, will this be taxed as capital gains (OK :cool: ) or income :( ?

Thanks
 
As long as you don't do it full time, i.e as your main source of income, then it will be liable to CGT.
 
I have it in writing from the IR that even if you trade full time using futures, options or Forex it is unlikely that you are carrying out a trade for tax purposes. They refered to several case law instances.

If you are not carrying out a trade then profits are liable to CGT and not income tax.

If you are position trading then why not spreadbet? Then there will be no tax.

JonnyT
 
Thanks for the answers.

I would love to SB (I always used to), but I have the pleasure of working for Citigroup which expressly prohibits their staff from doing so. I hate this company.

CGT should be OK as I don't use the allowance now and if I make more than 7k I'll be happy.
 
How would they know you had a spreadbet account?

This also sounds like an unenforceable contract term to me.

JonnyT
 
They know

I think the big brokers swap names regularly. My last job I didn't tell compliance I had a SB account. 6 months later I got a formal warning, nothing serious but you wouldn't want to do it twice.

Is there anyone out there that would know exactly what information gets send around the city firms?

Having said that our comliance dept seems to lose every second piece of paperwork they get anyway.
 
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