Daytrading stocks

Hi, I would like to ask how to report gains from daytrading stocks/shares. Is it a capital gains tax or an income tax? How is the distinction between daytrading and investing made? Many thanks.

Hi,

Whether you’re classed as a day trader or an investor could make a serious difference to your tax obligations.

The crucial distinction is that a ‘trader’ will not hold on to shares in the long-term. Whereas, an investor will hold shares for use as assets to then generate revenue, dividend income for example.

This is important because a stock trader will often pay Income Tax, whilst an investor will more likely pay Capital Gains Tax.

Thank you.

Thanks for the response, can you clarify how i should report any gains as a trader? Do i just make the distinction myself and report as income or do i communicate this with HMRC? Thanks

Hi GeorgeDimmy,
Please refer to Report and pay your Capital Gains Tax#.
Thank you.
 

Hello, I’m not from this country, I have a permit job visa , do I have to pay taxes if I do day trading?

Hi Neftali Pena rodriguez,
Yes, it can be Capaital Gains Tax on profits or Income Tax if you class this as an actual trade
Please see help here:
BIM56850 - Financial traders - instruments and shares: case law and individuals
Thank you. 

Hi, May I know whether am I classified as a "Trader" or "Investor" if in the tax year of 2023 to 2024 I disposed 450 transactions of stocks, future, options and foreign currency at the amount of over £2.5 millions for the purpose of profit making and majority of the transactions are day-trading? Should I report my profits or loss as "Income Tax" or "Capital gains Tax"? Thank you

Hi,
Please have a look at the guidance at BIM56810:
(Business Income Manual).  
This is something you will need to decide on.
Thank you.