UK taxation for futures and options trading

Millionaire said:
Main source of income is only a minor indicator to whether you should be classed as a self employed trader.
You are not a market maker or arbitrager, or an ex floor trader or ex bank dealer.
You are an amateur part time options speculator by the looks of things.

I think you should be paying CGT like Mr Manzur here:

Manzur
Mr Manzur was a retired surgeon. He used his own savings to begin acquiring stocks and shares. He made between 240 and 300 trades in a year using an online stockbroker. Some of the shares were turned over very quickly but others were retained for six months or more.

The tribunal held that Mr Manzur’s buying and selling amounted to the management of a portfolio of investments rather than trading. They upheld the view in Salt v Chamberlain that the badges of trade were of limited value and said there was no definitive checklist which could be used to say whether someone was trading or not. The number and frequency of transactions, and the short-term nature of the holdings alone did not establish trading. Other factors taken into account were:

  • the time spent on the activity (about two hours a day);
  • the fact that Mr Manzur did not entirely rely on his own expertise but used the advice of brokers;
  • that the activities were not characteristic of established share dealers, for example Mr Manzur had no customers and was dependent on market movements alone to make a profit.
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56860

One last thing if you ask you local Accountant if you should be paying income tax or CGT because you speculate full time or its your main source of income . 99% of the time he will say you must pay income tax rather than CGT to cover his own ass.
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It's my primary income- I'dbe so much worse off on CGT- but I can use that allowance for other things
 
just21 said:
Futures trading using TT or your platform of choice and then wrapped as a spreadbet so you pay no tax. http://www.kytegroup.com/index.php/ibet/
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Hi Everyone, I'm quite new tax resident in the UK (came last year as EU citizen).
That's very interesting and I was quite surprised to see something like that, but the link above isn't loading and I haven't found anything like that using google... is that solution that wraps futures into spreadbet no longer available?
If I want to trade american futures in the UK am I doomed to standard CGT rate or is there any loophole that could at least lower that ? Thank you very much...
 
ceen85 said:
Hi Everyone, I'm quite new tax resident in the UK (came last year as EU citizen).
That's very interesting and I was quite surprised to see something like that, but the link above isn't loading and I haven't found anything like that using google... is that solution that wraps futures into spreadbet no longer available?
If I want to trade american futures in the UK am I doomed to standard CGT rate or is there any loophole that could at least lower that ? Thank you very much...
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LOL- make a profit then worry about tax! If you think you'll hit CGT threshold you should be trading for a living and paying income tax . Spreadbets are not taxed but then 95% of people lose their money -just look at IG index
 
Windlesham1 said:
LOL- make a profit then worry about tax! If you think you'll hit CGT threshold you should be trading for a living and paying income tax . Spreadbets are not taxed but then 95% of people lose their money -just look at IG index
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Make a profit and then tell others what they should worry about! You have no idea about my background.

Anyone.. is there something like CGT threshold or just general tax free personal allowance ? This post not only brings no value but also looks misleading to me. Thanks for clarification and answering my simple question about futures.....
 
ceen85 said:
Make a profit and then tell others what they should worry about! You have no idea about my background.

Anyone.. is there something like CGT threshold or just general tax free personal allowance ? This post not only brings no value but also looks misleading to me. Thanks for clarification and answering my simple question about futures....
My point is: You will be taxed at 20% up to £50k as earnings
https://www.gov.uk/capital-gains-tax/rates
https://www.gov.uk/income-tax
I pay income tax on options as a sole trader and I get various deductions. If you're a high flyer then don't ask here!
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Thanks @globalarbtrader . I needed this as I exceeded the threshold last year, but not anything large enough to justify paying an accountant. Apparently someone forked and updated this for options, python3, CSV FX (I had to hack it a bit to get it to work though) etc, here at ( https://github.com/s3bs/python-uk-trading-tax-calculator ), and I'm using that version (I see you have now updated your repo for python3 as well).

This actually does give you all the info you need, but obviously you have to do the calculations yourself.
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but looks like the script does most of the calcs for me anyway, of course I'm going to recheck it all manually, but with less pain.

Disposal Proceeds = 313,413, Allowable Costs = 271,480, Disposals = 414
Year Gains = 189,949 Year Losses = -148,017 PROFIT = 41,932.63
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Wanted to know how 'Disposal Proceeds' (D) and 'Allowable costs' (A) are different from Gains(G)/Losses(L). I see that Profit can be calculated either as D-A or G-L. I understand Gains/Losses but not Proceeds/Costs.

For the 2023 tax year, I have a loss so far, but I have my disposal proceeds appearing as negative, At first I thought disposal proceeds meant the total amount of cash I got from closing positions, and since I have only long positions and no margin, I thought this meant cash from selling and should have always showed a positive for me. Googling for it confused me a bit, as some say Proceeds is the same as Gains.
 
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Ah, as I was looking into the report, it looks like this maybe a problem with the proceeds/costs calculations for the options support in the fork. I think I understand what costs/proceeds are now. Oh, and I did have an accidental short, as well as GBP.USD shorts implicitly from holding USD cash.

Once again, thanks for sharing the code.
 
Hi - I just found this thread and found it very useful. I started trading in futures this year and have some questions re the tax calculations. I mainly trade in Gold (/MGC) and Forex (/M6B) thru a US based platform (Tasty Trade). I do buy (long) futures and sell (short) futures. What I am finding difficult is to arrive the buys and sale price to arrive the profit/loss.
For ex: I bought /MGVG4 at $2030 and sold at $2050. I know that I made a profit of $300 (minus fees). But when it comes to reporting the same do I need to use the same numbers?

Another ex for forex: I bought /M6BH4 at 1.2650 and sold at 1.2750. There is something called tick size and value of tick. For forex, its 0.0001 and 0.626 respectively. With that into consideration, I will make $62.5 for this trade. Now I do not understand how to arrive to my cost and disposal that I need to fill in my SA?

Can someone please help me with that?

Regards,
Amit
 
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