Capital or Income

[commanderco]

For UK traders offshore is not an option as all monies have to be declared unless you fancy a spell in Lincoln nick.

LLCs are US creatures similar to the UK Limited Cos

JonnyT

Interesting. But if your living expenses in UK are "n" and the LLC earnings are say 5*n, obviously you pay tax on your drawings "n"
That is the law.
However, under what law must the LLC declare itself and its 5*n earnings to the UK tax department?

 

[JonnyT]

Can UK citizens have LLCs...I do not think they can.

As this is a UK site...

JonnyT

 

[commanderco]

Can UK citizens have LLCs...I do not think they can.

As this is a UK site...

JonnyT

The Foundation holds the LLC, I do not know what a UK citizen can & cannot do.

 

[johnsavva]

Although my accountant is a property specialist he did make the following points regarding taxing my trading income:

1) If your only profession is trading and you 'withdraw' money from your trading account the Inland Revenue will look upon this as 'income' and thus tax you under the Income Tax regime.

2) Any losses incurred while trading under the CGT system, unlike Income Tax, are 'carried forward' to the next year, meaning you will have to suffer any first year loss.

3) If you go down the CGT route you will not be able to claim expenses; phone bills, office, stationary, feed etc.

Personally I am trying to go the CGT route for the last two years and then swap to a limited company as from September. I would have gone this route for the last two years but unfortunately you cannot set up a limited company retrospectively.

As stated above my accountant is actually a property specialist so you'll need to find someone conversant in Trading.


Hope this helps

Vorpal.

I am a tax accountant and act for various traders. Sorry I have not had the time to read the posts above (hopefully will do over the weekend). I may be able to assist you.

 

[Rainmaker]

I went through the same issues as many above. I have now set up an LLP with the wife as a partner. It requires less admin than a limited company, allows us to deduct a salary (and hence pay pension contributions - which is a priority). There is NI to pay, but at a lower total rate than if I went through a limited company (where there is employer + employee NI).

This works for us because we want profit share (as opposed to dividends), so that we can shelter as much of the income as possible in our SIPPS. May not be the best route for everyone. It also gives us the added protection of limited liability, just in case!

When we have topped up our pensions over the next couple of years, we will set up an offshore OEIC so that we can defer CGT until we move abroad for good.

 

[maxxam80]

hello guys

I wondder if you can give sonme broad guidance

I am a full time UK student

over the past 2 years I have made some large profits (£100k+) trading U.S options (credit spreads and iron condors (so both buying and selling nasdaq options)

I have the money sitting in my US broker account now but what to have it settled up in a uk bank account.

I will seek a tax consultant but what tax do you think I am liable for?

I heard that derivitives are not taxed is this true??

thanks

 

[NotQuiteRandom]

Derivatives are taxed in the UK. Financial betting is not. So, if you were to spread bet on option prices rather than to actually trade them directly then you would not have a tax liability under current UK law.

Seek professional advice.

NQR

 

[donaldduke]

hello guys

I wondder if you can give sonme broad guidance

I am a full time UK student

over the past 2 years I have made some large profits (£100k+) trading U.S options (credit spreads and iron condors (so both buying and selling nasdaq options)

I have the money sitting in my US broker account now but what to have it settled up in a uk bank account.

I will seek a tax consultant but what tax do you think I am liable for?

I heard that derivitives are not taxed is this true??

thanks

You will be liable for tax, probably capital gains but maybe income tax.

Assuming capital gains: this will about: first 8K per year tax free, next 35K made a year taxed around 20%, and the rest taxed at about 40%.

This are rough figures but will give you an idea.

These figures are per year, so if you made 50K in year one and 50K in year two, your total libablity will be around 20% on average on the whole 100K (assuming no other income)

The tax on the profits made in the year ending April 2006 are due at the latest end Jan 07. Anything due after this will be charged interest.

 

[AsifA]

Hi folks,

I've bitten the bullet, given up the job and am going to trade fulltime in a few weeks time when the kids go back to School.

Initially I'm going to trade the EUR/USD Forex future and Mini Dow Future.

My understanding is that profits (should I make any) will be deemed as capital and thus Capital Gains Tax will apply. Is this correct?

As an extention to this I am married and will also open an account in the wifes name to use up her allowance. Again is this OK?

Thanks

JonnyT

My 2 cents worth - if you are spreadbetting ie not buying or selling the underlying asset its tax free.

 

[nkruger]

My 2 cents worth - if you are spreadbetting ie not buying or selling the underlying asset its tax free.

That is my understanding (of spreadbetting) but I believe there has been some threads here by members that have had to pay tax on SBing as it was there sole income ! How can this be true, if the SB companies tell us in their 'blurb' that it is TAX FREE ????

 

[vejay]

Futures trader tax

I am a tax accountant and act for various traders. Sorry I have not had the time to read the posts above (hopefully will do over the weekend). I may be able to assist you.

Hi,
I am a commodity trader in India. I understand that there is no income tax in UK for income earned through futures trading? Would it be the same for a foreign national living in UK and earning money thru futures trading? I am thinking of settling in Uk and be a Non resident Indian and trade full time on nymex and forex. Is it true that I will not be taxed?

Thanks in advance?

Vijaybhalaji AP