YM Futures - Will i need a Tax Accountant ?

Hi, can anyone out there who is trading US Futures help me. I live in the UK but have been trading U.S Stocks for a number of years and at end of year have needed an accountant to work through all my trades to work out what amount of tax is due. That usually costs c.£4000. If im trading Futures and more specifically the YM ( mini Dow), is the year end tax calculation (either for CGT or Income tax) simpler - ie will i need an accountant.

Be grateful for any advice - cheers.

I'm no expert, but why do you need an accountant? All you need to know is how much bigger your account is at the accounting date (6th April) and pay tax on that. The only complication would be adjusting for withdrawals and any payments in but any dummy can do that - not just an accountant.

It's a half hour job, isn't it?

thanks £10kLoser- i think you are probably right but if im trading the YM i will be trading in $ U.S. and am unsure how that would be adjusted throughout the tax/trading year to take into account the ever changing exchange rate - any thoughts on that?

£10kLoser said:

I'm no expert, but why do you need an accountant? All you need to know is how much bigger your account is at the accounting date (6th April) and pay tax on that. The only complication would be adjusting for withdrawals and any payments in but any dummy can do that - not just an accountant.

It's a half hour job, isn't it?

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Whether it's correct or not, I work on the principle that you only have a profit when the money is withdrawn to your bank. I would just work off your bank statements. After all, any money in your trading account is certainly not realised profit since you could easily lose it. It is the end result that interests the tax man.

I would simply take the year end profit/loss for tax purposes. Chances are, you'll never get questioned on that but if you do you can start worrying about the extra work involved by calculating every profit loss at the prevailing exchange rate!

Year end can be taken from your trading account rather than bank statements to simplify it even further.

You are taxable in the UK under UK laws regardless of trading US shares even with a US broker.

Thanks 10k i think i need to look into this further as i understood that the profit/loss is calculated from your account at year end irrespective of whether you have taken any money out or not. Obviously if you subsequently lose money from your account during the following year the loss can be offset against any CGT liability for the new year. Will let you know what i uncover and thanks very much for your thoughts.

Capital gains taxes on US futures are actually more favorable and easier to file than capital gains taxes on US equities...just do a google search...basically you just determine net gain or loss from year end totals.

thanks for that Daytradingpit - sorry about not acknowledging sooner - not logged in for a few days.

Do you trade US futures yourself?

You mentioned a google search i cant find anything worthwhile - is there a particular site you could point me towards??

Many thanks in anticipation

nodd1e

Have a chat with an accountant. He will tell you what info. he wants. A simple book is all you need - left hand side = income
Right Hand side= outgoings
A filing system - paper work equals evidence
Again - find another accountant who will tell you what he/she wants - you then save a lot of dosh by presenting him with a book so all he has to do is work out liability.

neil said:

Have a chat with an accountant. He will tell you what info. he wants. A simple book is all you need - left hand side = income
Right Hand side= outgoings
A filing system - paper work equals evidence
Again - find another accountant who will tell you what he/she wants - you then save a lot of dosh by presenting him with a book so all he has to do is work out liability.

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thanks Neil - getting the impression that record keeping/calculating gain or loss for US futures is a whole lot simpler (and therefore cheaper!) than for trading US equities. cheers

nodd1e said:

Thanks 10k i think i need to look into this further as i understood that the profit/loss is calculated from your account at year end irrespective of whether you have taken any money out or not. Obviously if you subsequently lose money from your account during the following year the loss can be offset against any CGT liability for the new year. Will let you know what i uncover and thanks very much for your thoughts.

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Whichever way you use to convert the US$ to £ I think you will have to be consistent. The profit is made on the date of disposal and then added up at the end of the tax year. Whether you convert the $ profit to sterling using the rate on the disposal date or at the end of the tax year is probably optional. But as I say I don't think you could keep switching to make an advantage. Something to be clarified with a knowledgeable accountant.
Don't forget if you hold US shares you need to complete a W8-BEN and lodge it with your broker.

Thanks for that Raysor, just registered with Tradestation for Futures and had to file the W8Ben form a few weeks back as i also have an Ameritrade account for trading US equities. Cheers