UK capital gains tax or income tax

[Humble Investor]

Hi,

I live in the UK and planning to start investing in stocks and options in the US. Would I have to pay CGT or income tax? I will not be day trading, probably 5-7 stocks a year and couple of option trades. I will be using my savings to support myself for the foreseeable future so my only income would be capital gains if any.

Thanks

 

[Speculate]

Neither.

Set yourself up as a company, draw minimum wage as a director and then pay your self in dividends from the company which are taxed at 20%. Go see an accountant.

If you have enough, get a private account in luxembourg or litchenstein. (Swiss accounts are for the riff raff) and go live somewhere warm

 

[Visaria]

Answer to your question is CGT. This is 18% in the UK, first £11k of gains is tax free. Concentrate on making your £11k first then you can worry about paying 18% of anything you make above this.

 

[zdreg]

Answer to your question is CGT. This is 18% in the UK, first £11k of gains is tax free. Concentrate on making your £11k first then you can worry about paying 18% of anything you make above this.

let's not forget the stamp tax or doesn't it apply?

 

[sheda]

let's not forget the stamp tax or doesn't it apply?

He wants to trade us equities, uk government have some sense there for stamp duty is only payable on the London stock exchange, where ever you are in the world as opposed to some kind of taxation net that catches anyone who dares step into the country no matter where their business is globally.

 

[d08]

let's not forget the stamp tax or doesn't it apply?

Unlikely an UK trader would trade the underlying instead of CFDs.

 

[Visaria]

interestingly, only 154000 people paid cgt in 2012/2013 tax year....i suspect mainly from sales of business assets rather than trading financial instruments.

 

[runtrader]

Also remember you can offset your costs against any profit and pay CGT on that amount. Costs include, losses, transaction costs, broker costs, datafeed costs, software, etc. Need to get the structure correct, i.e. Company vs Individual.

Or maybe the cheapest way is to keep it all quiet and not tell the taxman not that I support this type of behaviour, GB Plc needs all the cash it can get!!

 

[Visaria]

There's no need to incorporate unless you are trying to impress someone on an internet forum. Doesn't make sense anyway since you pay 20% tax as opposed to 18%!

Make the £11k first. Something tells me that since we only have 154000 paying cgt (out of which the vast number are business assets sales), not many people can even make £11k from trading shares. I believe that losses can be carried forward to future years as well.

 

[just21]

There's no need to incorporate unless you are trying to impress someone on an internet forum. Doesn't make sense anyway since you pay 20% tax as opposed to 18%!

Make the £11k first. Something tells me that since we only have 154000 paying cgt (out of which the vast number are business assets sales), not many people can even make £11k from trading shares. I believe that losses can be carried forward to future years as well.

That is because HMRC treat profit from trading for a living as income not cgt.