UK Tax On Swing Trades........

[GameOver22]

Hi

I am new here, i am 22, from England (Essex).

Ive been learning how to trade with my mentor for 6 months now, and im about to buy into FNSR, all my trading will be in the US, with my broker, www.lowtrades.com. Ive signed a USA tax form so i dont have to pay USA tax.

It will be my only income at the moment as im out of "action" with a bad foot, what will i be taxed? What percent of my profits (if any) will be taxed? Will i have to pay that in April?

How can i cut tax down, trade as a sole trader? An LTD? Or just nothing, on my own?

I will only be swing trading, not day trading, stocks.

Thanks

Matt :cheesy:

 

[JTrader]

I believe that people in the UK are able to make around £7500 in profits from part-time investments like shares trading and property letting before they have to pay UK capital gains tax.
I don't think it matters in which country the shares that you traded trade, or where the broker is based with who'm you hold a trading account. When you transfer those profits back to the UK, they will be liable for tax deductions.

 

[JonnyT]

Currently you can make a profit of £8500 per annum before CGT kicks in. The rate is then based on your marginal income tax rate.

JonnyT

 

[highisland]

I have a question along a similar vein... if I start trading from home (and that is all I will be doing) is it best to keep it simple and pay CGT once my profit for the year has exceeded £8.5k (assuming I make a profit) Then as I hopefully become more successful, would I then change my status to sole trader or LLP etc?

Thanks!

 

[Tuffty]

If trading in US$ beware of the complications that the translation into £ can cause when you come to complete your tax return. You'll have profits and losses for the trades and a translation gain or loss from when you convert the money from US$ to £ (and £ to US$ to fund the account).

 

[frugi]

http://www.trade2win.com/traderpedia/UK_taxation

Also try a search for "sole AND trader" and have a read of the tax forum.

http://www.trade2win.com/boards/forumdisplay.php?f=144

Generally, if trading is your only source of income you should inform your tax office what you're up to and then they will tell you how they want to tax you. Some people pay CGT, some income tax. If you are deemed to pay income tax then you can choose whether to set up a Ltd. Co.. Whehter it is to your advantage to do this depends on circumstances.

http://www.trioacc.co.uk/taxconsult/taxtraders.html are accountants who specialise in traders, if you need a helping hand.

 

[highisland]

Many thanks frugi for your reply and links. I'll take a look at them now.

Apologies to GameOver22 for hijacking your thread.

 

[piker]

Have you considered betting rather than trading an asset? Financial bets aren't taxed in the UK. Ok, you will pay a wider spread, but you will have to pay commission to a broker anyway. Just a thought.