UK Tax calculations with CFD and Forex trading.

Sep 30, 2017
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#1
With CFD and Forex trading, does anyone know how tax is calculated? Is tax calculated for the current tax year to the next? Like say on my account I had a a total profit or loss of -$399 for 2 months of trading over 50 trades. Would this be your figure for the year or do you have to declare each profit and loss on each individual trade?

The reason I ask this is because I find it hard to believe that it would be the latter as some people make 100's of trades a day so surely calculating this would be a bit insane. hence why the total profit of loss on the account would be more ideal? Is this how it works or not?

Thanks
 

f2calv

Well-known member
May 18, 2014
1,317
277
93
#2
With CFD and Forex trading, does anyone know how tax is calculated? Is tax calculated for the current tax year to the next? Like say on my account I had a a total profit or loss of -$399 for 2 months of trading over 50 trades. Would this be your figure for the year or do you have to declare each profit and loss on each individual trade?

The reason I ask this is because I find it hard to believe that it would be the latter as some people make 100's of trades a day so surely calculating this would be a bit insane. hence why the total profit of loss on the account would be more ideal? Is this how it works or not?

Thanks
When you come to doing your paper/online UK tax return and wish to claim capital gains (or losses) email your broker and ask them for a PnL statment for the tax year dates (6th April to 5th April following year).

You're only interested in the bottom line, i.e. the final profit/loss at the end of the year. The broker PnL statement is often better than the PnL reports available from their website as it will also include any dealing charges, overnight interest and other charges and you can simply attach that PDF to your tax return if you file online.

The individual trades don't matter, it's just the bottom line.

Note: Most UK spreadbetters in the early stages of getting to grips with trading should actually start on CFD's - the first ~10k is tax free. So if you are in the minority and actually reach that 10k level, then just switch to spread betting. The point being most traders lose, so at least if you lose you can offset that (CFD) capital loss against other capital gains for the year, and even carry it forwards to offset against future years. Simples :cool:

Note: you mention you are trading in non-GBP currency, I guess you would have to speak to an accountant/HMRC about upon which date the exchange rate should be applied to convert that USD into a GBP figure...
 
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jiffy81

New member
Sep 17, 2018
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#4
Hi, thanks for the reply. this is what I asssumed to be the case. That is what I have done with the statements etc;
Thanks for the information both of you provided. I am wondering a couple of questions:

- If I do make a profit with CFD, but it is below the tax allowance for CG, do I still need to file a tax assessment under U.K. rules?
- are all online brokers obliged to provide a PnL report upon request, and can we request it at closure of the account (or when emptying it) instead of waiting for end of tax year?
- would they provide the summary in GBP if requested, even the CFDs were traded in different currencies (i.e. I’ve traded on Tesla and Ericsson but my app always showed GBP).

I have asked some preliminary questions to the broker but not sure we are getting further unless I escalate it, so if anyone with the experience can help I’ll appreciate immensely.