Gains from Foreign Exchange Trading Fund

Hello, I invest in a Foreign Exchange Trading fund which uses my funds as collateral to made trades spread betting on currencies, and foreign exchange trading. They pay me a share of the gains on these trades. Is this income taxable and if so under what classification? Many thanks Martin

Hi,
Part of the confusion around HMRC trading taxes comes because everyone’s activities are different. Some who trade forex are given a tax exemption by HMRC, whereas others can face expensive obligations. 
UK tax implications are equally concerned with how you approach your trading activities as to what it is you are trading. The instrument is just one factor in your tax status. 
However, case law and regulations have settled on breaking trading activity into three distinct categories, for the purpose of taxation. 
1. Speculative 
The first category is speculative in nature and similar to gambling activities. 
If a trader falls under this bracket any day trading profits are normally free from Income Tax, business tax, and Capital Gains Tax. 
2. Self-Employed 
The second category taxes trading activity in the same way a normal self employed individual undergoing business activity is taxed. 
Traders may be liable to pay business tax, or the obligations of those who fall under the third tax bracket. 
3. Private Investor 
If a trader is classed as a private investor, their gains and losses normally fall under the Capital Gains Tax regime.
Thank you.