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Posted Tue, 17 May 2022 02:14:03 GMT by jedi54
Hello I wasn't employed during the previous tax year and speculated in multiple financial markets on my own (ie no company was created): - using an US broker to do hundreds of trades of financial derivatives (options), and also an handful (less that 10) stocks trades. The overall net profit/loss was a handful thousand pounds. - using an EU broker to trade cryptocurrencies. An handful of trades with an overall net profit/loss under a thousand pounds. - using UK account to trade forex. An handful of trades with an overall net profit/loss under a thousand pounds. The duration of these trades varied between minutes to weeks. I've googled to no end but haven't found a clear answer. Does the HMRC sees this as gambling or trading? Does it make a difference if the outcome was a profit or a loss? If it's gambling then am I correct that I only need to write a cover letter stating that together with the net profit/loss result? But if it's trading then should I fill these: - SA108 (capital gains) for the EU and UK trades? - but the US trades should it be SA106 (foreign income or gains)? Or should it be SA103 (self employment)? Thank you very much.
Posted Wed, 18 May 2022 12:28:25 GMT by HMRC Admin 10
Hi
If you are buying and selling the assets through a broker you are not gambling.
You would only be gambling if you are betting on which way a market is going rise or fall.
If you are only investing your own money it is likley that the disposal of the assets fall within capital gains.
You would then need to complete Sa108.
You would only need to complete the Sa106 if you suffer foreign tax on the trades.
CG56105 - Capital Gains Manual - HMRC internal manual - GOV.UK (www.gov.uk) and BIM20200 - Business Income Manual - HMRC internal manual - GOV.UK (www.gov.uk)
CG56105 - Capital Gains Manual - HMRC internal manual - GOV.UK
This manual is to help people compute chargeable gains (and allowable losses) for both capital gains tax and corporation tax purposes or check computations.
It supplements the basic guidance.
Thankyou.
Regards.
 

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