CFDs, capital gains tax, unemployed or self-employed?

[kenic]

hi,

I am currently unemployed (dropped out of uni this year) and have been paper trading cfds and been showing a steady profit.

I would like to now deposit and trade cfds on odl.

I have read other threads where it has been stated that any profits on cfds are taxed as capital gains.

But my questions are,
will i still be classified as unemployed or as a "sole trader"?


Kind Regards

 

[suchong]

If it's your sole source of income and you hope to 'make a living' out of it, then HMRC may try to classify you as a 'sole trader', in which case profits would be taxable as income.

If you can argue that you remain unemployed and the cfd activity is speculation / gambling, then the treatment would be capital gains.

 

[shadowninja]

CFDs are certainly not considered gambling. You will be required to submit a self-assessment tax form and I expect your benefits will be affected by any profits made. If you want to do it "tax-free" then use the spreadbetting derivative.