Forex

[davey85]

Is Forex gains subject to CGT? Read conflicting info re spread betting. Gains if draw out are £17k. Thanks!

 

[Red Wood]

Spread betting is absolutely not taxable gain. You'll end up losing most of it before you can keep hold of the profit anyway ?

 

[WaveJumper]

As above not taxable and as mentioned above certainly on one of my platforms over 70% of retail traders loss money so make good use of your "stops"

 

[LPB 123]

I think HMRC treat it like gambling so no tax. Although I'm sure if you're good then there must be a profit level at which HMRC would think this person is a professional trader and liable to tax.

 

[Mark T Jones]

My understanding (from someone on a start up course) is that it becomes taxable as soon as you treat it as a business.

I can't comment on the parameters, but in his case he was going to employ someone to do the admin etc.

 

[WaveJumper]

Spread betting can attract tax liability in the instance that it becomes the trader’s main or only source of income.

 

[Argentum Tax]

Spread betting can attract tax liability in the instance that it becomes the trader’s main or only source of income.

I would be interested to hear the authoritative source of your statement.

As far as I am aware spread betting, as with any betting, can be held as taxable if it is done in the course of a business. I am not aware that, as such, the business has to be the trader‘s main or sole source of income.

 

[WaveJumper]

I would be interested to hear the authoritative source of your statement.

As far as I am aware spread betting, as with any betting, can be held as taxable if it is done in the course of a business. I am not aware that, as such, the business has to be the trader‘s main or sole source of income.

Well you could be a sole trader ie an independent Forex trader who's sole income comes from spread betting, be an interesting conversation to have with HMRC.

 

[Red Wood]

Professional gambling.... Could be wrong but thought any gambling winning are not taxable, similar the losses are not deductable.

CFD trading on the other hand is taxable & deductable

 

[Argentum Tax]

Well you could be a sole trader ie an independent Forex trader who's sole income comes from spread betting, be an interesting conversation to have with HMRC.

@WaveJumper Yes, I agree, if one was a full time Forex trader dependant upon that trading income (that all happened to arise from spread betting) there would be no doubt that HMRC could win an argument that that income was taxable.

However, my point was that I don't think it is necessary that the Forex income is the sole income of the taxpaying person. I suspect that even if the person had other earnings and the Forex or spread betting income was a sideline, HMRC may be able to make a good case to argue that the Forex or spread betting winnings/income was also taxable earned income rather than casual gambling. Of course, it would all depend upon the facts and circumstances of that particular case.

 

[rizbit]

I have also read that Spread Betting profit is not taxable. I think for lot of people trading is betting or gambling or just a hobby for fun.

For example some guy heres about bitcoin then buys some and then makes £500 profit when he sells it... most likely he just got lucky as opposed to put in hard work and made that money. Would be the same as some guy telling you he won £500 on these new lottery scratchcards at the newsagents, then you went and bought one and won £500 aswell.... that should not really be taxed.... its a winning based on luck and non-business.

So if you have a job but then just for fun/hobby/trying your luck you buy ****** or stocks and make a few hundred quid, then that shouldnt be taxable as its not business... maybe thats where the trading allowance comes in....

 

[WaveJumper]

I have also read that Spread Betting profit is not taxable. I think for lot of people trading is betting or gambling or just a hobby for fun.

For example some guy heres about bitcoin then buys some and then makes £500 profit when he sells it... most likely he just got lucky as opposed to put in hard work and made that money. Would be the same as some guy telling you he won £500 on these new lottery scratchcards at the newsagents, then you went and bought one and won £500 aswell.... that should not really be taxed.... its a winning based on luck and non-business.

So if you have a job but then just for fun/hobby/trying your luck you buy ****** or stocks and make a few hundred quid, then that shouldnt be taxable as its not business... maybe thats where the trading allowance comes in....

The primary reason for spread betting to be tax free and classed as a ‘bet’ by HMRC is you never actually own an asset (its an intangible asset) unlike holding shares. Different rules will apply if you do this for business and as I mentioned before a bit of a grey area if as an individual its your sole income. However traders like myself may use spreads to hedge against an open position (held in shares) which for various reasons you might not want to liquidate immediately, in a lot of cases this will be a short. I would say for the majority of traders spreads are not their main source of ‘earnings’ an seen as a useful tool.

Buying Bitcoin which you mention is not spreed betting retail traders cannot spreed ****** (only professional traders can do this now in the UK) so those buying and selling ****** are actually holding an asset and as such profits from these would be seen as a gain by HMRC and taxed

 

[WaveJumper]

If it's spreadbetting/Forex trading where you're trading one currency against the other e.g. GBP/USD, EUR/USD, USD/YEN etc then it's tax free and extremly risky.

Certainly keeps one on their toes, not for the faint hearted though, and not just limited to forex

 

[Darviann]

I see spread betting is tax-free here — cool! But not sure how it works vs spot Forex. Does it change my platform or leverage?