FX Trading?

[maverick18]

Hi .. i work as a contractor but am interested in FX trading.

I know that spread-betting is not taxable in the UK.

However, I'd like to go the traditional way and trade thru a FX broker.

Can anyone shed more light on the tax treatment of any FX trading gains?

What if I trade in my own personal capacity?

And what if I were to trade thru my own company? Or open up a new company which only trades FX?

Cheers

[DonkeyRhubarb]

Hi .. i work as a contractor but am interested in FX trading.

I know that spread-betting is not taxable in the UK.

However, I'd like to go the traditional way and trade thru a FX broker.

Can anyone shed more light on the tax treatment of any FX trading gains?

What if I trade in my own personal capacity?

And what if I were to trade thru my own company? Or open up a new company which only trades FX?

Cheers

For the vast majority of people who try their hand at FX trading, tax is a non-issue.

But since you ask, I think it is only spread betting which is tax free. Gains made through trading options, futures, CFDs etc are subject to CGT.

[SantaClaus]

For the vast majority of people who try their hand at FX trading, tax is a non-issue.

But since you ask, I think it is only spread betting which is tax free. Gains made through trading options, futures, CFDs etc are subject to CGT.

I agree with DR on this one. None of you need to worry about the tax treatment of trading until you can do it successfully and consistently. I can count the number of successful traders I know on one hand, no wait...3 fingers! and it took them between 3-5 years to become profitable. I have traded for 3 years and I'm starting to reap rewards.

Trading appears deceptively simple because there are no rules or boundaries, you make your own. It is completely different to the structured office environment that contractors are used to.

If you have the time and capital to put in the effort, then go and do it, but you have been warned it is not an easier option than contracting.

Regarding tax, there is divided opinion whether spreadbetting as a sole source of income is taxable. Some people have said if spreadbetting is your only income, it is taxable. Therefore it is worth keeping your self-employed status and maybe doing a bit of consulting on the side.

[DonkeyRhubarb]

Regarding tax, there is divided opinion whether spreadbetting as a sole source of income is taxable. Some people have said if spreadbetting is your only income, it is taxable. Therefore it is worth keeping your self-employed status and maybe doing a bit of consulting on the side.

There is a simple reason why HMRC don't really care about this - most spreadbetters are net losers.

[SantaClaus]

There is a simple reason why HMRC don't really care about this - most spreadbetters are net losers.

Yep, agree. But we know that if HMRC smell money, they will change the rules and sure as hell try to get it

[Jog On]

I think doing it through your LTD might class you as an investment company and bring your CT into the higher bracket. I *think* that there's a threshold for for this or some other way to classify it but I've yet to find out what it is.

You're probably better off spread betting as an individual until it becomes your sole source of income in which case get something else as well.