UK Tax & Benefits

[Sanook]

Hi,

I'd really appreciate some information regarding what my tax situation is, now that I trade for a living. I am using both a spreadbetting company and a forex broker, but will limit the profit made through the broker, to under the capital gains tax level.

I'm just wondering if I need to inform the inland revenue about what my plans are, and whether there are any forms I need to fill in.

I'm also not claiming any benefits.

Thank you.

 

[Trader333]

but will limit the profit made through the broker, to under the capital gains tax level.

Limiting your profits doesnt make any sense to me at all so why do you feel you need to do it ?

You will need to inform the IR if you are liable for tax based on your profitability after the end of the financial year. In spite of the many arguments on this board, I still dont think that you need to declare profits you have made from SB.


Paul

 

[roguetrader]

Since you are in a position to control your profits to such a degree as to

'but will limit the profit made through the broker, to under the capital gains tax level.'

shouldn't that read "but am limiting....." or is this a future planned activity? The reason I ask is, if it is something you have been doing for a while, and thus a typo, then why don't you spend a little money on an accountant who can be held accountable, no pun intended, for the specific advice he/she gives you. If on the other hand it is a future planned activity, you could wait 'till next tax reporting and see what money is involved. Don't take this the wrong way, it may not be the most tactfully worded reply you get, but when you are dealing with the Inland Revenue you need professional advice, not opinion from a discussion forum

Like Paul I can see no earthly reason why anyone would want to limit their profits to below capital gains. If by any chance you are assuming that by keeping it below capital gains you will not have to report, (still don't see the logic) you should be aware that the requirement to report is two-fold, not just based on capital gains level but also on your annual turnover.

 

[wheezergeezer]

Hi,

I'd really appreciate some information regarding what my tax situation is, now that I trade for a living. I am using both a spreadbetting company and a forex broker, but will limit the profit made through the broker, to under the capital gains tax level.

I'm just wondering if I need to inform the inland revenue about what my plans are, and whether there are any forms I need to fill in.

I'm also not claiming any benefits.

Thank you.

If youre a full time trader I believe you will get taxed on the first profit of 10% ( I think its under £2000) then 22% then up to Approximatly £35000 and 40% beyond that,
they will treat you like any other business/ sole trader, I dont believe you can get away with under capital gains tax limit unless youre a full time tax payer,
you can go on the inland revenue website and ask .........its free,
PLEASE NOTE: the above figures are only used as a guide, I'M NOT an accountant or tax advisor..........SO DYOR..........GOOD LUCK

 

[Sanook]

Thanks for the replies.

Regarding limiting my profits, I meant only in using the forex broker. At the moment I'm using a spreadbetting company and am therefore not (hopefully) liable to pay tax. I'd like to try a dedicated forex brokerage, just to see if there's any difference really, but I gather that trading this way is liable to tax if your profits exceed £8,500.

I'm not limiting my profits with my main spreadbetting account. I am using a forex demo account, but I'd still like to 'test' it live.

I should have worded my question purely from a spreadbetting perspective. So with that in mind, I'd be interested to hear how other spreadbetters deal with tax and the inland revenue. Do they have to mention it to the inland revenue at all. If they don't mention it, is there anything else they do need to mention about how they're currently living.

I suppose I'm also just trying to understand what I'm classed as, now that I don't 'work', but spreadbet instead. I believe I read on this forum that I'm now 'not employed', rather than being classed as unemployed. I just want to make sure I'm not doing anything illegal.

I may have to give the inland revenue a call on monday, as looking through their site the only form that seems relevant to me is the P50. However, this form is for claiming back tax now that I'm not employed, but I don't wish to do this either. I just wish to continue as I'm doing now, not claiming any benefits etc, but safe in the knowledge it's all legal.

Thanks.

 

[roguetrader]

Sorry I can't really help you any further, I don't use spreadbetting, I don't see that it would be an effective way for me to trade. I trade full-time through a broker and my accountant takes care of all my tax issues. If you are trading through a proper broker as well as a spreadbetter it is almost certain that you will have to make some sort of declaration to the IR on the basis of annual turnover regardless of whether you exceed the capital gains threshold or not
Best of luck with your endeavours

By the way you'll likely find most of the questions on your mind have at least been discussed here, if not answered, rightly or wrongly.
http://www.trade2win.com/boards/forumdisplay.php?f=144
I still advise anyone to seek properly qualified advice