Forex trading - capital loss

Hi, I have made some losses from 2019 onwards. I have a full time job on top of this. I read about forex trading being tax free in the uk but I am not too sure about this. Could you please clarify this whether any profits would be tax free? Also, could I report these losses and if it is allowable, how do I go about it? Will this be capital loss relief or go under income tax? Thanks

Hi Lint,
Gains from Forex trading are taxable in the UK under Capital Gains Tax.
Although there is no requirement to declare losses to HMRC, if you do, you can carry them forward to set agains a gain arising in a future tax year. You have 4 years from the end of the tax year the losses arise, to declare them to HMRC.
If you are required to complete a tax return, you would declare the losses in the Capital Gains section or on SA108 and where no tax return is required, a written letter with supporting evidence would be posted to so that the losses can be agreed and logged for the future.
H.M. Revenue and Customs Self Assessment BX9 1AS.
Thank you. 


 

Hello, if I lose 9000£ in forex and then withdraw 9000£ will I have to pay tax even if I made 0£ profit

Hi,
Currency other than sterling is a chargeable asset and its disposal can give rise to a chargeable gain or an allowable loss.  
Please have a look at link below for more information.
CG78300 - Foreign currency: introduction
Thank you.

Hello, I would like to check if the Taxable Income from Saving Interest can be offset by Foreign Exchange Loss? For example, - In May 2023, I convert GBP 30,000 to USD 37,000 (principal) in an online broker platform. - During May to Nov 2023, some interest was gained about GBP 2,000. - In Dec 2024, I convert the USD 37,000 to GBP 27,000 - It result in a FX loss of GBP 3,000 (GBP 30,000 - GBP 27,000) compared with the principal in May 2023. Could the FX loss (GBP 3,000) use to offset the interest gain of GBP 2,000? If yes, any special note for reporting in tax return? If no, is it becasue I treat the GBP 2,000 as interest instead of capital gain? Thanks.

Hi,
The losses would be used against future capital gains.
Thankyou.

this thread started off with the statement " ...I read about forex trading being tax free in the uk...." . This requires further clarification I think. My understanding is if forex trading gains were made through spread trading or spreadbetting that these gains are classed as "gambling" returns and therfore the profits do not need o be delared as they are "tax Free". This is where the forex trading being interpreted as tax free comes from in the UK. This then leads to the subject of losses and my understanding is forex trading carried out using a spreadbetting broker platform were not claimable as a loss as equally to the gains these would be classed as a gambling loss and therefore would not be classed as a normal trading loss? Is my reasoning valid? I understand also if one has no other source of income and be fortunate to be able to trade the forex profiably through spreadbetting then the HMRC has a provision to be able to tax such gains as income? Is this true please? Thank you

Hi J Patel,
Please refer to:
BIM22015 - Meaning of trade: exceptions and alternatives: betting and gambling - introduction.
Thank you.