Income tax or CGT for US futures trading by a UK trader.
Hi
Brief question: I live in the UK but wish to solely trade a US futures account, what tax should I be paying on this - income or capital gains?
i think that would depend on whether or not it will be your main source of income(is so then you would pay income tax i think) or if is not then CGT would come into play??
But anyway i think you need to get professional advice about this...
rathcoole_exile
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can you set yourself up cheaply registered in Dubai (tax free) and spend the money saved on tax flying out there once a year for a holiday ? what would be the legal ramifications ?
fibonelli
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Generally speaking, my undestanding is that:
UK domiciles who are ordinarily resident in the UK are taxed on their worldwide income and worldwide capital gains. Trading proceeds ought to be treated as capital gains I believe.
There are always offshore companies, trusts, alter egos in the caymen, etc .... which have the intension of hiding gains or income from the UK tax man. But this is essentially tax evasion, and generally not advisable. There are always clever accountants and lawyers who offer to set you up all sorts of difficult-to-trace paper trails to hide your proceeds, but if the chips were to ever come down, you alone are culpable.
You always have the option of living outside the UK for 6 months+ per tax year, and you are only taxed on UK-sourced income and CGT. Pick up a pad in Paris, maybe another in Amsterdam, dust off the old backpack, and you and your laptop could be tax-exempt nomad!
UK domiciles who are ordinarily resident in the UK are taxed on their worldwide income and worldwide capital gains. Trading proceeds ought to be treated as capital gains I believe.
There are always offshore companies, trusts, alter egos in the caymen, etc .... which have the intension of hiding gains or income from the UK tax man. But this is essentially tax evasion, and generally not advisable. There are always clever accountants and lawyers who offer to set you up all sorts of difficult-to-trace paper trails to hide your proceeds, but if the chips were to ever come down, you alone are culpable.
You always have the option of living outside the UK for 6 months+ per tax year, and you are only taxed on UK-sourced income and CGT. Pick up a pad in Paris, maybe another in Amsterdam, dust off the old backpack, and you and your laptop could be tax-exempt nomad!
the blades
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Hi
Brief question: I live in the UK but wish to solely trade a US futures account, what tax should I be paying on this - income or capital gains
from what I gather, it will depend on what they class as your main job. If you worked full time as a road sweeper and made £15K per year, but made £50K per year trading futures "as a hobby", your £50K would be CGT.
If trading was your main form of work (not necessarily income), you'd pay tax on your trading gains as income.
Don't quote me on the above - but it's the basis on which I'm proceeding.
UTB
Well, this is a pretty big field, but from http://www.hmrc.gov.uk/guidance/cgt-introduction.pdf
"You may own assets outside the UK. Those could include tangible assets such as land and buildings or shares in a company that is registered outside the UK. In most cases, CGT applies to assets that you own directly and that are situated abroad just as it does to assets in the UK."
Yes, I think there is a difference in trading as an occupation, and paying income tax vs. trading as an investor with a day job, and paying CGT.
Anyway, working out how to pay tax on the massive profits from being a legendary trader would be a nice problem to have.
"You may own assets outside the UK. Those could include tangible assets such as land and buildings or shares in a company that is registered outside the UK. In most cases, CGT applies to assets that you own directly and that are situated abroad just as it does to assets in the UK."
Yes, I think there is a difference in trading as an occupation, and paying income tax vs. trading as an investor with a day job, and paying CGT.
Anyway, working out how to pay tax on the massive profits from being a legendary trader would be a nice problem to have.
Trade Offshore
It would be easier if the money you wish to trade is already out of the UK but talk to your accountant and try offshore stock brokers who may be able to help you as they are specialised in working with clients offshore and can contact lawyers and accountants for free and give you a rapid answer,
Cheers
B
Hi
Brief question: I live in the UK but wish to solely trade a US futures account, what tax should I be paying on this - income or capital gains
It would be easier if the money you wish to trade is already out of the UK but talk to your accountant and try offshore stock brokers who may be able to help you as they are specialised in working with clients offshore and can contact lawyers and accountants for free and give you a rapid answer,
Cheers
B
Yes! On this point, does anyone know of a prop firm that offers spread betting? Knowledge To Action offers funding starting at £10k, but they charge £4k for training, which I don't want, and the funding has a ceiling much lower than futures prop firms.
Trading Spaces
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