There isn't a blanket 'tax rule for professional traders', HMRC calculate tax liability and assess taxable and tax exempt income on a number of qualifying criteria. Like I said it's a minefield which is why most professionals employ the services of a certified accountant to prepare their books and submit a tax return, it's cost effective in the long run. Hope that helps
Cable is correct. In the UK the LOCAL Inspector of Taxes decides on the correct interpretation of the rules and you can write to him and ask him how he will deal with it, or better still get an accountant with good contacts to try to get his approval. But if gambling is your sole or main income then you can expect to lose any tax free status. You can always move house and try another inspector but it's pretty clear that main income is not tax free, even if it is from "tax-free" gambling. You can get round it if you are spread trading as a UK citizen from outside the UK for 180+ days
The tax liability for any form of income doesn't depend on what other forms of income you have. Either it's taxable or it's not. However, HMRC does have a history of making illegal tax demands and spending huge sums defending them in the courts. So you do need very deep pockets if you are going to fight for your rights in the UK.
If only it were that simple, we could do away with 90% of HMRC's pen pushers and spend our tax dollars on something of value! The terms 'subsistence income' and 'primary income' seem to be key elements in tax assessment when it comes to what's taxable and what isn't, but like I say I'm no xspurt
Thanks Cabletrader for your reply but I want to be armed with advice from traders at the coalface, so to speak. My husband and I intend to return to the UK in six months and I intend to trade full time. You are a professional trader (yes?) and you have been trading for 2 years, 5 years, 10 years, yes? Do you pay tax on your profits from forex trading?
I'm claiming the 5th (or the British equivalent) As ignorance of the law is no defence, and as tax law is a maze, I would recommend you speak to a professional who specializes in this area. There's a lot to take into consideration such as your husbands earnings, your and your husbands domicility, other income......the list goes on and on. There are several ways to reduce/avoid tax liability (legally!), although some loopholes and tax havens are being closed as we speak, a good accountant will be able to advise you specific to your circumstances better than a layman like me on a trading forum. On a different note, where are you returning to and from? Assuming you didn't escape to a third world country and you're not returning to Halifax or somewhere, why ever are you coming back, missing the warm beer and cold weather?