Tax on CDF and spreadbetting for compaines.

[singh2jatt]

Hi

I have been trading for around one year now and i am considering to start up my own firm. Trading my own capital, or other peoples (if they give it 2 me lol)

The question is does the tax exemstion change on spreadbeting for Limited compaines in UK, as this may be the main source of bussiness and what if was CDF's.

Has anyone got link to the inland revenue website?

Also this might sound stupid, but could i register for VAT?

 

[ns1000]

Spreadbetting is free from Capital Gains Tax only. If you traded as a limited company, your annual profits would still be liable to Corporation Tax (around 30%). Same story with CFDs.

 

[singh2jatt]

Thanks

 

[Technically Fundamental]

Spreadbetting is classed as gambling... All proceeds from gambling are completely tax free.

CFDS are subjected to capital gains and you have a tax free personal allowance of around 9200 per year i.e you can earn 9k through CFDs and pay zero tax

Trading CFDS through a limited company would enable you to claim expenses but all company profits would be subjected to Corp Tax at 21%

Given that capital gains have now been reduced to a flat rate of 18% after your allowance I'd say this is the best option for you. Unles syou are some sort of millionaire with offshore status etc lol
You would however be

 

[timetotrade]

If you go down the route of trading other people's money then you would need to be fsa registered.


timetotrade

 

[ukdaytrader]

Through a limited company, you are subject to 30% tax and not 21% irrespective of size as you are classified as an investment company...so better to go with it on a personal basis as Aaronmalins says.

 

[jeffsmith]

It would be good if you registered as a limited company, then it all would be as per the norms and regulations..

 

[ukdaytrader]

Well if you want to do this properly, you would set up a trust / investment company offshore, Ireland for example. It would not normally be a limited company.

Your limited company / sole trader then charges the investment company a management fee. The investments would need to be held in a segregated client account. Your own limited company should not be keeping client monies as the tax on the return on these investments is liable to those that invested the money not the owner of the company providing investment services.