Is your deposit taxed?

[rlambert]

Could someone please clarify whether or not your initial deposit into your account is taxable in the UK? Say I deposit 20,000 into a US forex account and make 10,000 that year, am I taxed (income) on the 30,000 or just the 10,000?

If I'm only taxed on the 10,000, can I still deduct that initial deposit from my income in later years?

Thanks.

 

[Rhody Trader]

If you are putting your money into a tax deferred account like a traditional IRA, the initial capital (up to the permissible limit) will be deductable from your income in the effective year you make the deposit. After that point, anything you take out of the account will be taxed.

If you are talking a standard brokerage account, the initial deposit is considered to have already been taxed when you made it as income at some point in the past. It won't get taxed again (nor will you be able to deduct it). Your taxes moving ahead will only be on the income you make.