Forex tax uk

So far I do not show my trading profits to my country. In Australia, if you're trading as a "hobby" then profit is tax free.

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But there's no clear line separating "hobby" from "making a living", which is taxable. I guess if you're a losing trader, then the tax office will classify your trading as a "hobby" and prevent you from claiming losses hehe.

I completely agree with you regarding the odds depending on your mastery of those aforementioned variables. I think losses are made primarily by traders enticed by the profit potential of forex and thus forgo the rigorous practice, training, mindset etc required to be consistently profitable. But not to go off on a tangent here, I have no idea where you'd find information on tax rates for other jurisdictions.

However I remember reading an FT article that said lots of countries dont even leglislate for forex gains yet retail gains , others treat gains as taxable under capital gains or income tax and some countries haven't even legalised spread betting yet!

That said I'd still like to here your thoughts on why, as you said, the odds are in OUR favour I didn't pay any taxes from foreign broker. As government can't detect my earning. Spread Betting and trading Forex on a Margined account with the use of Leverage are two different accounts and as a result are regulated by two different authorities.

Is Spread Betting Still Tax Free In the UK

On both of the above accounts, any income from trading is simply added to your total income, and taxed accordingly. Neither are tax free! The catch is that the brokers state it's tax free, when what they really mean is that any profits up to and including your personal allowance are tax free.

Any income from trading, or in fact gambling which exceeds this personal tax free allowance is taxable. Professional gamblers are taxed on there income, the HMRC tax office have an option on their tax forms which classifies you as a "professional speculator" - thus you WILL be taxed should you declare your earnings correctly.

The source of the above information is directly from HM Revenue and Customs as I looked into this a few years back when at the time I was also confused about the whole issue. So in short, in the UK spread betting and Forex trading on leverage is tax free, but only up to your personal allowance. Your earnings must be to small then to raise alarms with the tax office.

Think about what happens when you withdraw all your profits from your broker, your broker that has to file his accounts. When he files his annual accounts the tax office will see who they have paid money to, and this will then be cross checked with tax received by these clients, hence you!

This is called Tax Auditing, a standard procedure carried out by the tax man. It is always a good practice to your taxes on the Income generated from Forex trading as it helps you stay Safe and the funds you earn are legitimate.

Well, I guess it varies - depending on your gov's tax policy, it varies from one country to the other.

And yes you will have to pay taxes regardless, as long as you are doing it to make money the tax man would want some of it. I personally wont risk it, these days its much easier for them to track you and if you are making so much you better start paying because there is no way around it once they found out.

Im not too sure if working in mcdonald to cover up the millions you are making in trading is going to work. Because if you are making more in trading than what you earn in mcdonalds then technically trading become your main source of income so you will get taxed on that. On the other hand, you can write off the losses, but again, this depends on your country, in this case, UK's tax policy. The last time I checked, they had some sort of a ceiling, for losses to be declared so you may not have to pay tax on all the investment, just on the profits.

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Kinda doubtful, but it would be awesome if that were the case. Are you sure about this? I wish Im in that position right now. Start with low risk capital or high risk capital? Paying tax is easier than making millions in forex.