Hi GAT - I know this is an old thread but did this ever get settled? I have just started trading futures and am trying to run some simulations on future net returns but not sure whether to use a CGT tax rate or income tax rate. Also if trading is subject to income tax and I have a loss making year which I cannot offset against other income (very possible currently) do you know if HMRC allows these losses to be carried forward. Thanks
I've been trading my own money now for 6 full tax years. The percentage of my 'income' that was trading income has varied between 0% and over 95%. In all of those years my trading profits have been taxed as CGT (basically that is what I have put in my SA, and that is what HMRC has used for the calculation). As for offsetting / carrying forward losses, sorry I don't know for sure. I've never tried it under the CGT regime (not sure if it's possible with CGT), I just sell shares to make sure I always use the entire CGT limit even if I've made a loss on my futures trading (obviously if I've made a profit, then I try and crystallise losses in my long only portfolio to reduce the CGT gain). GAT
I shall be carrying forward losses as I pay income tax as an options trader. I have had a couple of losing years in the past and this only offsets the next tax year. Wondering if I can claim CGT allowance on shares, though
If I'd been using this forum when the thread started I would have posted that in the UK you can use spreadbetting to access the financial markets. Spreadbetting profits are exempt from tax.
I think income or CGT are ok up to 50k yearly profit. Above that and LTD could work better. At least this was the advice I received from a UK accountant a few years ago.
I had thought about that, but I'm really not money driven! I don't mind paying tax- though I resent council tax at £50 to get my bin(which I haul to the end of the driveway) emptied - you know what I mean!
HMRC have got sniffy about this over time, but it doesn't work for me as the spreads on options are terrible.
I mind paying taxes. For me it's like paying protection to the mafia. If taxes were equal for all (%) and used well, then I wouldn't mind. When I see budgets and money allocated on weapons, wars, divisions... And then tight on children school meal, homelessness and other poverty issue. I mind it very much and I have no shame in saying it. They should be ashamed at government for existing and wasting oxygen by breathing.