I have been practicing trading in the uk on demo accounts for the past few months and would like to start a real account using micro lots , I would probably use oanda and trade 1p per pip , This is really a hobby and I don’t really expect to make lots of money if any per year , So am I right in saying that I don’t have to pay tax until my earning hits £10,100 or over in the uk .
if’s not your main source of income, and you earn below the tax free allowance, then you will pay no tax on trading/spread betting profits.
However if your profits from trading do become your main source of income and exceed the tax free allowance then you will have to pay tax.
Unfortunately it’s not black and white, and it comes down to what other earnings you generate other than that of trading. But, it’s safe to say that if your going to be making less than £10,000 profit per year you don’t need to worry about tax for now.
As above but with added caveat that if you open a,“Spread Betting” forex account it’s classed as gambling and the broker deducts a small amount pre-trade just like pre-paying tax on a bet on the Horses in the UK so then you may not be libel for tax on the winnings.Several UK brokers do,“Spread Betting” accounts.
My plan is to open a normal Forex account with tight low spreads and worry about the Tax if I ever got close to £10,000 and then change to a Spread Betting forex account.
It is a grey area in the UK.
Useful link,
thanks for your answer ! I will be only trading small amounts and its really mostly for fun so it will be well under £10.000 and really if I made a few hundred per year I would be very. The only reason I don’t want to use spread betting is the minimum wager seems high , I can get 100 units - 1p at oanda and a very low deposit seem the better option but only without worrying about tax so I will be definitely under £10.000 .
You still need to declare it as income, fill in an online tax return form. If you do this its quite straightforward. Do it from day one so everything’s above board
This is the type of question that you should direct to a tax consultant/lawyer in your region to be absolutely sure what the rules are.