UK tax position on trading profits

Do the British have to pay taxes on their profits from trading?

While I am not an expert, residents of the UK have the option of opening a 'spread-bet' account with their broker which does not attract ANY tax. The UK is one of a handful of tax residences that permit this, including Australia if I am not mistaken.

Profits from a normal trading account are to be declared as earnings and will attract tax at the normal scales, as I have it.

EDIT: Having read Squiggler's post below I did a quick google and they have it 100% correct. Any normal taxpayer who 'wins' a bet will not attract a tax liability, with the exception of traders IF trading is their main source of income. Then it appears to be classed as capital gains.

Yes correct if spread betting its tax free in the UK and IE but you need to have a dedicated spread betting account. All other types of trading accounts will be subject to taxes and HMRC will want to know.

In the UK, spread betting is not tax free if it is your main source of income.

Simply put, all types of trading is subject to Capital Gains Tax which maxes out at 28%. I calculate this on a monthly basis so that I can use something called Tax Certificates to put what I am due to pay at the end of tax year into a safe government account ready for the bill. It took me a good 6 months after being profitable some years back to figure out what the tax position exactly is.

So as long as you don't try to complicate your position by trading for others and earning commissions then your accountant can present all your gains against all of your losses and you will be taxed on the outcome.
Your job title will be Private Investor, yes even if you are trading in foreign currency.

I'm not going debate this further, I thought I'd try to help the original poster. Straight out of the HMRC's mouth this comes, retail or professional traders have to pay CGT only on earnings and I think code 3 national insurance.

This article does not constitute tax or financial advise; please find a tax accountant and financial advisor. Tax accountant for the tax and financial advisor for anything like Tax Certificates. A tax accountant and financial advisor usually cannot comment on both I have found.

A quick google confirms your point. Best not put 'trader' on the spread bet application form...

yes thats correct,but ther is one area in which is slightly grey,and that is a professional gambler,which is not taxable the view on the inland revenue was to separate any form of gambling,the presumption being most gamblers hold more losses than gains.in years past i took that route on my returns,but this can get extremely complicated.

i have interests now in other ventures so i can wiggle under the carpet and any gains remain tax free

My tax accountant has said recently (last 2 years) they have separated the definition between a professional gambler in gaming from anyone trading in any way on any financial instruments.

Musing out loud (and clearly out of my depth)...
It is generally accepted that more people lose than win. If betting gets treated as a profession, does this not allow people to offset their losses against other forms of taxable income. Which would be a net loser for the tax man, considering more people lose than win. Or have I got this all wrong?

its been many years since i looked at my tax this way,but that sounds about right,they dont leave many holes open for long

Check out the "Traders Tax Club" for up to date information.

hey everyone
I’m a UK resident and working full time , i earn 16000£ pa . Unfortunately i couldn’t find any related case so I’m seeking advice . i would like to trade Options, Stocks, and Shares with an US based broker . My investment would not be more than 5000£, and being realistic I’m expecting 0-500£ profit annually, is this amount would be subject of Capital Gain Tax ? Is it part of the yearly exemption (2015/16 - £11,100) where income and gains up to these limits are not subject to UK tax.
Today George Osborn presented the 2 016 budget and the first 1000 pounds on investment is tax free. – even if it foreign income ?