UK Brokers and Tax | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Best brokers for introducing brokers(IB)? 20 replies

Brokers and Rebates on these brokers? 20 replies

Best places to live for FX traders in terms of tax and brokers 7 replies

Asian Forex Brokers, Brokers with offices in Asia 33 replies

Any brokers bigger than Interactive Brokers? 5 replies

UK Brokers and Tax

  • #1
  • First Post: Jan 8, 2008 3:41am Jan 8, 2008 3:41am
Hello all.

I am about to start trading live after demoing and testing with Alpari UK. What I'd like to know is which brokers are UK traders using for live trades? I have dabbled with spreadbetting, but most platforms are not really geared up for good forex trading, and most spreadbetting firms close and re-open positions and include the spread each time. The advantage of tax free trading is just too good to ignore though.
So, my questions are:-

 

  1. Which brokers are UK traders using and are getting good service from?
  2. If you are using a forex broker, what method are you using to minimise tax, e.g. Ltd Company/dividends etc.
  3. If you’re using spreadbetting, which are the best dealers/platforms (Including mobile trading)

The main contenders that I have been looking at are:-

  1. Spreadbetting:

    1. GFT, IG Index, City Index.

  2. Forex Brokers

    1. Alpari, GFT, FXCM (UK)

I’m not looking to evade paying tax, just avoid it (important legal distinction ).

Thanks for any help you can give.

  • #2
  • Jan 8, 2008 3:55am Jan 8, 2008 3:55am
Your not looking to avoid paying taxes, your looking to minimize it... avoiding and not paying is the same thing. This is my speciality in the U.S. but not for the U.K.

The best answer can be found by locating an accountant that specializes in the forex. They may know tricks that most U.K. traders here on this forum do not know about. One simple phone call will answer all of your questions.
  • #3
  • Jan 9, 2008 7:28pm Jan 9, 2008 7:28pm
Look at post #4... this may interest you.
http://www.forexfactory.com/showthread.php?t=11587


Good Luck
  • #4
  • Jan 10, 2008 2:39am Jan 10, 2008 2:39am
Thanks for pointing that out
  • #5
  • Jan 10, 2008 7:12am Jan 10, 2008 7:12am
  • #6
  • Jan 10, 2008 7:51am Jan 10, 2008 7:51am
From what I have read you can earn up to £8000 before you are taxed under capital gains. If you spread bet it is tax free. (at the moment)

I use Alpari uk, no problems so far.
  • #7
  • Jan 10, 2008 8:00am Jan 10, 2008 8:00am
I use Alpari for demo, and if their live system is similar than it would be ideal. My only concern with them is it's a Russian owned company and they have the "I am a professional Trader" tick box on their sign up form, which remove the FSA protection.
  • #8
  • Feb 9, 2008 3:03pm Feb 9, 2008 3:03pm
Quoting cryten
From what I have read you can earn up to £8000 before you are taxed under capital gains. If you spread bet it is tax free. (at the moment)

I use Alpari uk, no problems so far.
Capital gains limit is now £9200 according to my accountant

Kind Regards
Steve
  • #9
  • Feb 9, 2008 4:16pm Feb 9, 2008 4:16pm
Labour's policy seems to be to add taxes to everything. Won't be surprised if they one day tax Spreadbetting.
  • #10
  • Feb 9, 2008 6:03pm Feb 9, 2008 6:03pm
Quoting steviet
Capital gains limit is now £9200 according to my accountant

Kind Regards
Steve
Yep, correct. It's raised for the new tax year.
Also, that's per individual, as far as I understand it. So you could have a spouses allowance as well. (if you have one that is
Carpe Divitiae
  • #11
  • Feb 9, 2008 6:04pm Feb 9, 2008 6:04pm
Quoting forexmoments
Labour's policy seems to be to add taxes to everything. Won't be surprised if they one day tax Spreadbetting.
Can't see that happening for a while yet.
They have to be very carefull, cause if they do that, you could claim back your losses on "gambling" too.

I don't think they would want to go there.
Carpe Divitiae
  • #12
  • Feb 9, 2008 6:11pm Feb 9, 2008 6:11pm
Quote

  1. Which brokers are UK traders using and are getting good service from?
  2. If you are using a forex broker, what method are you using to minimise tax, e.g. Ltd Company/dividends etc.
  3. If you’re using spreadbetting, which are the best dealers/platforms (Including mobile trading)

  1. Personally, in the uk, I use Interactive brokers
  2. I declare forex profit as income. (call me crazy, but believe me, it has it's advantages). Other derivative gains I use a mix of capgains and dividends via a ltd company.
  3. If I can make one recommendation. Don't spreadbet forex. Spreadbet equities and indexes, but forex is a bastard to spreadbet. Personally I've only had it work on a day-trading basis ie no holding of positions overnight etc. and it's only really worth it if you're gonna bet around £5-£10 a pip.

Just my 2cents, erm pence.

Carpe Divitiae
  • #13
  • Feb 10, 2008 9:21am Feb 10, 2008 9:21am
I asked a broker about forex tax rules (uk) and I was told profits are classed as income and NOT capital gains.
  • #14
  • Feb 10, 2008 1:10pm Feb 10, 2008 1:10pm
Quoting RichD
I asked a broker about forex tax rules (uk) and I was told profits are classed as income and NOT capital gains.
I don't think you have to. Remember, he's a broker, not a tax expert {surprising he even offered tax advice actually }

I am by no means a tax whiz either, but, you can do it as capgains.
I think it comes down to a couple of things, like:
1. Are you even considered a trader by the HMRC.
2. What kind of trader are you. Day, swing, position etc.
3. What do you use your trading for. Speculation, hedging etc.
4. What instruments you trade etc.
5. How much profit you make {they love this one}

I would get a knowledgeable accountant to confirm if I was you.

I chose to declare mine as income, as I'm classed as a "trader" according to the HMRC, and it does have advantages that outway the 60/40 split with the taxman.
Carpe Divitiae
  • #15
  • Feb 11, 2008 4:11am Feb 11, 2008 4:11am
Please tell?
  • #16
  • Feb 11, 2008 6:40am Feb 11, 2008 6:40am
Quoting jedsman
Please tell?
Like I said, I'm NO tax whiz, so I'm sure there are more than a few.
What's been a bonus for me personally doing it this way, is being able to carry forward old losses and offset current gains against them. With capgains, you can only do it in the same year, I think.
With income, well this type of income anyway, you can carry forward losses for a couple years. I'll have to read up again, and get it straight from my accountant.

I will say this though as a word of caution. If you're deciding on it being classed as income, make sure you are absolutely anal about keeping records. And I mean ANAL, every cent/pence/pip gained and spent has to be accounted for, else the HMRC will eat you for breakfast. They already hate the fact that some can make a living off trading, and like to try and "catch them out" on certain things. They are still believers in the old "time worked = money earnt" regime.

Get good professional advise, I cannot stress it enough.
Carpe Divitiae
  • #17
  • Last Post: May 14, 2008 9:04am May 14, 2008 9:04am
Quoting fsiltd
Like I said, I'm NO tax whiz, so I'm sure there are more than a few.
What's been a bonus for me personally doing it this way, is being able to carry forward old losses and offset current gains against them. With capgains, you can only do it in the same year, I think.
With income, well this type of income anyway, you can carry forward losses for a couple years. I'll have to read up again, and get it straight from my accountant.

I will say this though as a word of caution. If you're deciding on it being classed as income, make sure you are absolutely anal about keeping records. And I mean ANAL, every cent/pence/pip gained and spent has to be accounted for, else the HMRC will eat you for breakfast. They already hate the fact that some can make a living off trading, and like to try and "catch them out" on certain things. They are still believers in the old "time worked = money earnt" regime.

Get good professional advise, I cannot stress it enough.
.
Hi,
What is HMRC?
Which is better to class profit as income and capital gain?
How do you get classed as expert or ?
How do you get register with FSA or other regulatory bodies?
Alnames.
0 traders viewing now