Setting up a tax efficient structure

Strugglingtrader · Dec 3, 2015

Hi Guys,
ST here it's been a while since I posted anything because it's been a hard slog for the last year.
You may recall I was let go last x-mas and went back to trading. I've now managed to generate good returns for the last year and have also started mirror trading 5 sub accounts.
I've been generating 5% a month for almost a year now and would like to move to a tax efficient structure. Each account has £50k and I have family and friends that are happy to open a further 10 accounts.
Can anyone offer me any advice on setting up a tax efficient structure for basically about £250k - £500k? Fund doesn't seem like the way to go with that kind of money, it may grow to £1m in a year or two.
Any advice would be appreciated.
ST

options-george · Dec 5, 2015

Strugglingtrader said:
Hi Guys,
ST here it's been a while since I posted anything because it's been a hard slog for the last year.
You may recall I was let go last x-mas and went back to trading. I've now managed to generate good returns for the last year and have also started mirror trading 5 sub accounts.
I've been generating 5% a month for almost a year now and would like to move to a tax efficient structure. Each account has £50k and I have family and friends that are happy to open a further 10 accounts.
Can anyone offer me any advice on setting up a tax efficient structure for basically about £250k - £500k? Fund doesn't seem like the way to go with that kind of money, it may grow to £1m in a year or two.
Any advice would be appreciated.
ST

hi ST,
well done on 1) getting consistent returns of 5% a month and 2) working with your family and friends to have them comfortable with you trading their funds.

I have been using a medium-size accounting firm for several years, who have several clients who are in the same position as you are/are getting yourself into. So they are probably well placed to answer all your questions. If you are starting to deal in bigger sums, then it's definitely worthwhile paying for some proper advice, as the downside of getting it wrong could be rather bad.

Things that you should consider (sorry if you are already well aware of these points!):
- FCA regulations that may apply if you are trading money on behalf of family and firends
- tax implications on trading profits/losses in the mirror accounts
- tax implications on your share of the trading profits/losses
- impact on tax implications depending on whether you are using spreadbets, CFD's, other...

Please get in touch if you would like me to introduce you to the firm.

PS Have you also looked at getting rebates from brokers for introducing your friends and family as new accounts. I believe this is completely standard in the industry and is something you should do.

Strugglingtrader · Dec 5, 2015

Thanks OG for your kind words, taking the time to reply to the thread and your advice. I still feel I'm one bad trade away from it can all going pear shaped pretty quickly. Please do introduce me to the accounting firm my email is a rather acrimonious [email protected]

I'm not really that bothered about tax efficiency for myself, but for my friends and family. I guess I will adopt the same structure. I naturally don't charge them otherwise they wouldn't be friends or family

right, so it is just a case of trading on their behalf where they should have tax efficiency.

I trade CFD because my less than efficient broker could not mirror for SB. They are also milking me fully by not giving any rebates as they can see how sticky I am, having traded every single day this year without a day off on their platform.

My best
ST

options-george said:
hi ST,
well done on 1) getting consistent returns of 5% a month and 2) working with your family and friends to have them comfortable with you trading their funds.

I have been using a medium-size accounting firm for several years, who have several clients who are in the same position as you are/are getting yourself into. So they are probably well placed to answer all your questions. If you are starting to deal in bigger sums, then it's definitely worthwhile paying for some proper advice, as the downside of getting it wrong could be rather bad.

Things that you should consider (sorry if you are already well aware of these points!):
- FCA regulations that may apply if you are trading money on behalf of family and firends
- tax implications on trading profits/losses in the mirror accounts
- tax implications on your share of the trading profits/losses
- impact on tax implications depending on whether you are using spreadbets, CFD's, other...

Please get in touch if you would like me to introduce you to the firm.

PS Have you also looked at getting rebates from brokers for introducing your friends and family as new accounts. I believe this is completely standard in the industry and is something you should do.

itspossible · Dec 6, 2015

cue condescending supercilious defensive reply whereby i am put down as being an idiot.

Setting up a tax efficient structure

Strugglingtrader

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options-george

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Strugglingtrader

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itspossible

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