DO TRADERS PAY TAX?
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- čas přidán 22. 07. 2024
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In this video, I wanted to give you well rounded, non-biased insights around the grey area of tax when it comes to trading.
I have so many questions and messages weekly to cover such a video so here it is.
I hope this video helps you understand how to approach your trading business with a much more level head in order for you to have the most success.
No fluff, just value.
Enjoy.
Jason G
PS.
I look forward to seeing your comments and questions below!
For more information on what was discussed here, check out the following resource:
HMRC: www.gov.uk/hmrc-internal-manu...
Core Spreads: bit.ly/trade-nation
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No part of this video or any of the content in it is legal financial advice.
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![TAX ON FOREX [Do you pay tax on forex trading, tax on spreadbetting, UK forex tax, CFD tax, CGT tax]](/img/n.gif)
Great video, Been trading for just under 2 years now & still didn't understand exactly how Tax works around Day-Trading. Made a lot of sense Thanks!
Jason, thank you so much, i had watched about 7 videos on taxation for traders, i have gotten more from this one than from all the others combined, granted i wanted taxation from the UK side, its more like my country, than the US Content. Thanks again.
Excellent video to keep
I spoke to HMRC myself, came to same conclusion s
I confirmed no tax on gambling winnings as long as trading (spreadbetting) isn't "seen" as your main income (main job)
21:00 HMRC compares
GAMBLING (for fun... short-term trades or sporadic attempts at trading)
vs SPECULATION (for profit... short-term trades is potentially gambling still, long-term trades is investing)
vs PRO TRADING (for income... whether short-term or long-term if you do it as a 1st job or even as a 2nd job...it is work!)
vs INVESTING (for capital growth...whether short-term or long-term it's speculative hence taxable)
You are taxed on your Speculator profit, Income profit your Capital profit
(work attracts Income Tax IT and Capital Gains Tax CGT)
You are NOT taxed on your Gambling profits
(you are a Gambler, not speculating or working hence no tax to be paid)
22:36 HMRC rule of thumb
(CG tax on investing [long-term] vs Income tax on Trading [short-term])
21:34 tax illustration1
(income tax vs CG tax)
24:24 tax illustration2
(income tax vs CG tax)
25:00 24:28 Trading as a business ie LTD co.6
(HMRC criteria "badges of trade" 22:39 to proove you're a business / pro trader or speculator)
BornToDoIt excellent contribution to this channel! Thank you for taking the time to write something so valuable to the trading community. Keep it up!
@@JasonGraystone thanx...in truth if I recap it helps me understand the core points, if the comment helps others even better.
This video was a much needed insight so thank you
Thanks this has cleared things up for me. I have a limited business in construction so if i were to just spreadbet, i would not be declaring or taxed on any profits nor would i be able to claim for any loses/expenses???
If i did 1M £ ( short-term) like pro traiding , i will pay incam tax ??
How much tax on pro trading? Just the income tax?
not making any money yet, yet i still watched in full as i know for sure that this is my trade and am mastering it at the moment
What you said about having multiple accounts was pure gold.
I came across your video almost by accident. Started to browse and suddenly realized I’d found a GENUINE guy.
Wow! You Sir are a rarity! Keep these coming in PLEASE...... Mr T.
Thank you Jason! very helpful and much appreciated!
Thank you another good point to keep hold of. As I build my path into trading brilliant advice from all
Great stuff Gaz
Nice one Jason. Please keep this video up as I might come back to it for future purposes👍
Dann will do
Very informative video, especially from a UK perspective .Thank you!👍🏾
Great stuff JASON this is what has been slowing me down is working through all the tax information before hand. Good to know I'm on the right path. Thank you.
Excellent stuff. Glad we could help
@@JasonGraystone thank you my friend !!
Thank you Jason. This information was very helpful.
Glad you got value from it
Thanks Jason , this is something I have been questioning myself 👍
Hopefully this video will make you take the right approach and save any nasty surprises
Finally cleared that up! Gold! Happy Christmas Jason!
same to you!
Brought out around the right time of year.
I've tried searching for this information a lot and There's little to no help on the internet so thankyou so much for clearing it up Jason! Very valuable video 🤘
I agree!
Glad you found it valuable.
Wonderful info thanks. Just what I was looking for.
amazing video . Just what i was looking for . ! loads of very useful information. !
Lamonz88 excellent
Really handy video, thanks very much.
I love this video yet most bank accounts don't allow Traders starling
any tips?
Hi Jason, thank you for this video - the best info on this issue yet... I've checked! Quick question - Please could you tell me whether VAT is charged on CFD's traded by a broker and if yes, at what percentage? Any exemptions? I am assuming no VAT on spread betting since it is exempt from tax. Br, Sue
Interesting and helpful. Thank you..
awareness raised! Nice Jason, thx
Excellent
Appreciate the video thanks!
I don’t do spread betting
I don’t do investing
I do day-trade on the NYSE for my main income - Do I pay income tax or capital gains tax on my gains ?
This is the best information on UK taxes on you tube, thanks mate its really made things clear
I agree 💯
Great video and loads of info thanks
Great video jay, one question. Is the money in a forex account without withdrawing it taxable ?
Thank u, I was asking everyone this a few days ago
you are welcome!
love the video bro
Thank you....good inside ... about the tax...
Do I need to pay tax on yearly basis or only when I make a withdrawal? For example, if I never withdraw from an account for 3 years. Do I have to pay tax every year or after 3 years when I withdraw? Thank you
Great to see you got round to making this video!
One area that is even 'greyer' is the realm of trading and/or investing in crypto-assets. Possibly, not your area but increasingly folk will be investing in not only Bitcoin but other Distributed Ledger tokens.
Sure. Thanks for watching
Crypto trading is unregulated in UK so I don't see it guided under corporate taxation, or personal taxation...
STAY OUT OF CRYPTO TILL ITS REGULATED.
Cheers Jason, loved how u got professional people involved. I didn’t think it would be as simple as No Tax in the UK
Excellent video to keep
I spoke to HMRC myself, came to same conclusion s
I confirmed no tax on gambling winnings as long as trading (spreadbetting) isn't "seen" as your main income (main job)
21:00 HMRC compares
GAMBLING (for fun... short-term trades or sporadic attempts at trading)
vs SPECULATION (for profit... short-term trades is potentially gambling still, long-term trades is investing)
vs PRO TRADING (for income... whether short-term or long-term if you do it as a 1st job or even as a 2nd job...it is work!)
vs INVESTING (for capital growth...whether short-term or long-term it's speculative hence taxable)
You are taxed on your Speculator profit, Income profit your Capital profit
(work attracts Income Tax IT and Capital Gains Tax CGT)
You are NOT taxed on your Gambling profits
(you are a Gambler, not speculating or working hence no tax to be paid)
22:36 HMRC rule of thumb
(CG tax on investing [long-term] vs Income tax on Trading [short-term])
21:34 tax illustration1
(income tax vs CG tax)
24:24 tax illustration2
(income tax vs CG tax)
25:00 24:28 Trading as a business ie LTD co.6
(HMRC criteria "badges of trade" 22:39 to proove you're a business / pro trader not just a speculator)
Mate this is absolutely brilliant read so much on this and even tho I have already found a lot of this information for myself this has cleared so much fuzziness up thank you!
No problem at all
Thank You, Very much Appreciated..
No worries. Glad you enjoyed it.
This was top notch informative 🙏
thank you Jason , now we have a idea . but you can maybe trade from a foreign country where there is no control or am i wrong ?
Big thank you for this info.
The Lastbwoyscout you’re welcome
Greetings! What about binary options trading? Is it tax free? Thank you
Such a graystone area! Nice video
Thank you Jason!
As of now (April 2022), the HMRC website income tax page states profit below £12,570 is not subject to income tax, due to personal allowance.
If your a trader full time , your saying it’s best to have 2 accounts one with what you think you’ll be taxed and the other for profits ? But how will you know how much your gonna be taxed when you make a different amount each month ?
Can you make a video on setting up a corporation(not anonymous shell) in places like British Virgin Islands or Panama where there is no tax on Forex capital gains
Is this the same as short term profits using options? And is this for the UK?
So if you live in the UK and have a spread betting account which you're liable for losses in the account, you don't have to pay tax according to the UK gambling law. Correct?
Hi. Does the same apply if you have an “AXI” account and your making money from someone else’s trades, ie, “piggyback” trading.
So this video applies mainly to those in the uk?
"Just get the right advice".... that's why we are here.
And the right advice would be to speak to your accountant and explain your trading plan to see what category you fall in to
Great vid thanks ,what a bloody mine field. and I though developing a consistent trading system was difficult ! LOL
Haha, trading is easy! Its the tax that is the ultimate task 😂
Fantastic Video 👌🏼
Excellent content. Thank You.
I have a question that I'm confused and can't find an answer anywhere.. Let say I makes hundred trade on forex, and whatever amount I gain or lost in that one hundred trade is tax? Or I only get tax if I withdraw the money from my account? This is a big confusing part for me.. Let say I make $100 dollar and I leave that $100 dollar in my account, do I get tax for that dollars sitting in my account? Or I only get tax when I withdraw that hundred dollar?
Why not have a primary CFD/ECN account (Capital Gains/Income tax) plus a Spread Bet account for tax free gambling? Surely the obvious solution?
You should state which COUNTRY you are referring to in your title bar new guy.
Hello sir. I have a question. What if u r using a broker that doesn't accept US residents and u r one of them but u r using it somehow!. When it comes to taxes is that can be a problem paying them?. Thanks
Thank you , great content
You are welcome!
Since recently I thought all trading accounts on forex which have a spread are tax free but this is not the case you need to a spread account to be expected from tax as the spread account trades with stakes NOT lots
Best video ever👏🏾👏🏾👏🏾👏🏾👏🏾
What if you earn £50000 in a cfd account and earn another £50000 in a spreadbetting account. Then can you only declare the cfd account as income Because spreadbetting account is supposed to be tax free.
Usually the spreads on spreadbets are HUGE compared to ECN CFDs
They are not crazy though, unless you trade tick charts, but yeh I prefer True ECN or STP and no MM or DD.
@@fumanrandom9478 MM/DD?
Re Spread Betting started as sports betting so the nominal notion is that its a gamble.
Please can you share the contact of the Accountant. Great video. Thanks
Thanks very much for making this video, there's not much out there on this subject. Would you happen to know if you were trading a CFD account with overall profits & also have a spread bet account, do you think the SB account would have to pay taxes on.
Thank you.
Well Done Jason. This is a great topic you have covered. :)
glad you thought so!
Excellent video
Does anyone have any good recommendations for some tax advisors with specialist knowledge in forex? (around Hertfordshire)
Yes contact me Contact on whatsapp
👇👇👇👇
9.1.8.6.0.0.0.7.4.9 (+1) country code
Spread betting only exists in Britain, no?
Thank you,, great video
Can you recommend any tax advisor ( accaccounting office)?
Please
And the truth will set you free. Thank you j.
Always free
What a fantastic video.
glad you liked it
what about trading in US futures?
29:33 haha, Zoom call mentioned in 2019! Didn't think it existed back then lol.
Been using zoom since 2016!
Very educative tutorial with well detailed information I appreciate, *The Semyon Tchernenko Strategy* was the only way I was able to get results. look it up.
Great video, very informative!!! I'm into my 5th year trading now - my first 2 years were net losing years, my 3rd year was even there about's, last year I made a significant 98% return and when you finally realise why you went through all the struggles of becoming a trader it's so satisfying!! This year I'm up 70% Y on Y but I haven't touched my account since I became profitable, I just want to grow it. I already have an accountant as I'm self-employed but I really should start talking to them about the trading aspect of my life!! Great advice ! Thanks
Danny Passant how did you find an accountant that had knowledge about forex as I can’t find one online ?
So I'm investing in S&P500 in a CFD account, am I right in saying I dont pay income tax when I withdraw my investment? What taxes do I pay? And what do I pay annually?
For aid and assistance contact him privately on what's App 👇👇👇👇
9.1.8.6.0.0.0.7.4.9 (+1) country code
So insightful ...
which country tax free for traders ?
What do u call those tv’s behind his back I want one just like that
Monitors?
Does a gambler who doesn't have any other income have to pay tax?
sir i want to know tax in belgium
What would prop firm trading in the UK be taxed as? Would it be 10%?
Id like to know this also, did you find out?
need to trim up the tash a bit, better not to cover the lip, will loook a lot slicker
😂 Hard life!
if trading is your primary source of income and you trade CFDS only is it still taxable through Capital gains tax or is it seen as income tax cos it's your only source of income ? This is the confusing aspect
@@dsdsdsdsdsds3139 Did you get more information on this mate? It's very subjective
hey jason, quick question, say you NEVER withdraw your forex profits from your broker and it just stays and builds up in your trading account, will you still be taxed?
No sir if you don’t withdraw your funds from trading account into your personal account you don’t pay any tax.whenever you withdraw funds from trading account only then you work out your tax payment.
Great advice
simple question , there is only one broker provider in Europa who gives you chance to withdrawal your money direct in your Credit card and from there to bank account , yes traders pay taxes 😎😀😄
If you live is US how can I connect with the Nexchain community here. I want 200k of my savings into it.
Gerry Cramer’s UK doppelgänger. 🇬🇧
Hi Jason what if you just spreadbet? Surely none of that is taxable?
correct
As the video states, there are limitations around spreadbetting.
If I trade stocks with my own money and want to open a limited company run by only me to avoid high taxes, can I legally do that? That way I pay corporate tax at 19% and also take salary out.
For aid and assistance Contact me privately on whatsapp 👇👇👇👇
9.1.8.6.0.0.0.7.4.9 (+1) country code
Anyone know any accountants or firms that specialise in forex tax who would do your taxes for you? (In the uk)
Did you get any more info on this? Would help a lot having a forex tax specialist seeing how much of a grey area it is
www.google.com 'Forex CFD accountants'
Excellent
Glad you liked it
Any idea how taxes are affected if you trade for a prop firm?
I'd like to know this too
Are you still required to file for taxes even if youre negative all year?
You must always do a tax return (personal or corporate) whether you were in pre tax
profit or not.
Do you know with any concrete proof that you pay tax on withdrawn funds that reach your bank or do you pay tax on closed trades still in your account broker regardless if you withdraw profits or not. (UK by the way). Seems to be a common question that's a mystery
Same question! Please let me know if you find the right answer. Thank you
You get taxed on the money withdrawn
@@youngjedi6857 Thanks, did you go through a tax advisor or accountant or something to get this conclusion?
@@youngjedi6857 can't I just withdraw below the specific band I'm aiming for, just to reduce amount of tax paid, despite trading in the tens of thousands?
@@69smales69 id definitely go with a tax advisor
I was going to do the FTMO challenge next year (since the 10% profit gain is the easy part if you use proper risk management), but im just afraid of what I am ACTUALLY going to make because I am then going to get taxed on my 70% profit split... not sure what the percentage on that would be though, probably another 30% taken away...
Did you actually figure out how much tax you have to pay as an FTMO funded trader making six figures a year in the UK? Nobody seems to know 🤦♂️. LLC? Sole trader?
@@divinasi0n unsure, still haven't tried funding challenges yet, but did finally find a strategy to stick with
@FishOnTV (Jarod Valenti) since I asked, I found the answer in Matt To Million's video. The calculation is extremely complicated but you keep 69k on a 100k withdrawal - or 31% tax. The conversion rate on profits in USD over to GBP will incur a 20% loss too though right? 😒
Glad to hear you finally found a good strategy. I primarily trade ICT/Smart Money Concepts and its abslutely superb.
Hey Jason man I just got to say you are an incredible educator for making this video it was so needed for me and many others and I can see it is becoming more of concern because the video was only created this year.
So one question Jason and I'm sure it will help many others too: I've oppend a Ltd company and ive earnt £100,000 by the end of the year trading BUT it's still in my "trading account" and i have not made any withdrawals into my company account. Is that taxable or isit only once I make the withdrawal? Thank you
Is an asset so shown on your company returns under assets ...not taxable in isolation but if offset against liabilities the the difference probably subject to CG tax
It will be taxable the moment it is converted to a benefit ie as a company profit or as a directors dividend so subject to income tax
I would check with a tax accountant, if your making 100k and setting up a company..spend the few quid they tax advice.
As the video says don't ignore the tax aspect.
See if you can setup a business and trading account outside the EU...then your not subject to UK laws (and I'm taxation).
Find a country with more favourable taxation (let it be your retirement pot of money in another country separate from anything in UK).
Just had a thought, what about including the profits of gambling (yes all 100k by an individual not as a company) but putting it into a n investment ISA or similar tax protected pension or trust for kids?
@@borntodoit8744 thanks a lot will take your advice especially on setting up offshore !
John Smith it depends if the company is trading or a holding company.
If it’s limited you may be liable for corporation tax on profits which is 20%
@@JasonGraystone I understand that the COMPANY is liable for tax but I asking what if I have not withdrawn the money in my trading ie brokers account?
@@JohnSmith-sb5ym did you get anymore info on if its taxed on withdrawn funds hitting your bank only or taxed when you close a trade regardless if you withdraw or not?
If you make a profit, lets say £100 on a trade, does that increase your turnover by £100? If you then lose £50 on the next trade, does your turnover figure get reduced by £50 or does your turnover stay the same and you have to claim back the loss?
you would class it as £100. then when it comes to the figures for the tax you would take away all loses for the year for that big figure.
What you are referring to is an income statement. All of your revenue minus your expenses. Whatever the total profit is after this deduction "Earnings" you will pay tax on that at your rate of tax.
@@JasonGraystone Do all your winning trades count towards the turnover figure & all your losing trades get put down as losses that you can claim back, so if you winning trades were £20000 and your losing trades were £17000, the turnover would be £20000 but your actual profit or gain would be £3000 (this is excluding any fees & commissions which I know are expenses)? Or would you class your turnover as £3000 which is winners minus losers ( and again just excluding the expenses for simplicity)?