Hi, I’m a UK citizen and I've been working as an IT contractor for over 25 years.
I’ve been dabbling in the stock markets for many years now. Actually I’m one of the many that got seriously burnt when the dot-com bubble burst back in 2000. Since then I’ve been carrying forward substantial capital gains losses (£100k+) year to year via my self assessment tax returns.
Since April 2009 I’ve not been able to find any IT work, so in between searching for IT contracts I’ve been spending my time playing the markets, i.e. buying and selling mainly US stocks through a US brokerage firm. The number of trades I’m doing now has almost trebled compared to the number I use to do whilst in an IT contract (i.e. around 30-40 disposals per annum now).
During the 2009-2010 tax year my share trading gains were around £60K, and in the current tax year I’ve managed to realise gains of around £50K so far. Also as I’ve failed to find any IT work for the last 16 months, my share trading has been my only source of income.
The worry I have is that the taxman may now consider me as a Share Trader instead of a Share Investor and so any gains will be treated as income and liable to income tax. An even bigger worry then is that I will not be able to offset my gains with the large losses I made when the dot-com bubble burst... this is going to really hurt, I need to be able to claw back those losses!
My question is do I have anything to worry about?... Can I continue to offset my gains against previous losses in my self assessment tax return without worrying about the taxman challenging later?... Please let me know your thoughts.
Many thanks in advance for your help
Kieran
I’ve been dabbling in the stock markets for many years now. Actually I’m one of the many that got seriously burnt when the dot-com bubble burst back in 2000. Since then I’ve been carrying forward substantial capital gains losses (£100k+) year to year via my self assessment tax returns.
Since April 2009 I’ve not been able to find any IT work, so in between searching for IT contracts I’ve been spending my time playing the markets, i.e. buying and selling mainly US stocks through a US brokerage firm. The number of trades I’m doing now has almost trebled compared to the number I use to do whilst in an IT contract (i.e. around 30-40 disposals per annum now).
During the 2009-2010 tax year my share trading gains were around £60K, and in the current tax year I’ve managed to realise gains of around £50K so far. Also as I’ve failed to find any IT work for the last 16 months, my share trading has been my only source of income.
The worry I have is that the taxman may now consider me as a Share Trader instead of a Share Investor and so any gains will be treated as income and liable to income tax. An even bigger worry then is that I will not be able to offset my gains with the large losses I made when the dot-com bubble burst... this is going to really hurt, I need to be able to claw back those losses!
My question is do I have anything to worry about?... Can I continue to offset my gains against previous losses in my self assessment tax return without worrying about the taxman challenging later?... Please let me know your thoughts.
Many thanks in advance for your help
Kieran
