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Learning, Sharing, and Teaching => Taxes => UK Tax Discussion => Topic started by: Dgibs on November 09, 2018, 02:01:13 AM

Title: FOREX
Post by: Dgibs on November 09, 2018, 02:01:13 AM
So,

Thought I'd throw this out there in case anyone has any input.
I'd have put it in the trading section but need UK specific info.

Forex day trading.
The gains made from that.
Tax free as it is akin to matched betting / gambling?
Capital Gains tax as its trading profits?
Neither?

I've spoken to some Tax people, and HMRC , and been given all 3 answers.

Also, would the answer change if I wasn't doing the actual trading, but someone else was on my behalf?

Any ideas, people?

All the best.
Title: Re: FOREX
Post by: cerat0n1a on November 09, 2018, 03:26:44 AM
LOL - you'll need to make a profit in order to worry about taxes. Good luck!

After that, it does get complicated, and as you have found, even HMRC will tell you "it depends".

There's 3 ways that forex (or indeed any other kind of "daytrading") can be classified - gambling, trading or investment.
There are no hard and fast rules - HMRC look at the pattern of your trading, why you bought and sold things, how long you owned them for, how often you trade, how many trades you make etc etc. To some extent, the instrument used makes a difference - a spreadbetting account is more likely to be treated as gambling than holding currency reserves, for example.

Important thing is to keep good records of everything and get proper advice if you actually look like you need to worry about tax.
Title: Re: FOREX
Post by: Dgibs on November 09, 2018, 03:34:14 AM
Thanks,

That's about how I have understood it also. Very Vague and sounds like they can just tax you any old way they please!

I guess i'll just have to submit the results and see how it lands.

I've already well passed this years CGT threshold with profits so whichever way it lands i'll likely owe something.

I'm still interested to hear from anyone with 1st hand experience.

All the best.
Title: Re: FOREX
Post by: Manchester on November 19, 2018, 03:33:48 AM
I'm also interested in any advice people have on here.  I've made a good chunk of profit on Matched Betting so happy to risk a small amount on this.  Just want to know if anyone does it and what time/risk goes into it?
Title: Re: FOREX
Post by: daverobev on November 19, 2018, 02:12:52 PM
I'm also interested in any advice people have on here.  I've made a good chunk of profit on Matched Betting so happy to risk a small amount on this.  Just want to know if anyone does it and what time/risk goes into it?

Forex trading is like stock day trading. It (arguably) is gambling, whereas matched betting is not. MB is gaming the system for guaranteed profit.

I mean - you could trade GBP-USD on Brexit news lately - every time something bad happens, GBP dips. A couple of days later it goes back up a bit. But... what if it doesn't?
Title: Re: FOREX
Post by: Manchester on November 20, 2018, 04:42:05 AM
Fair enough @daverobev I thought as much.  I'll give it a miss!