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  #11 (permalink)
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In the UK you have an allowance for 10kŁ tho. So if you made 30kŁ of net profit, you'd pay 30% of 30kŁ or 9kŁ, which is below the 10kŁ allowance, so you'd pay 0.

If you're gonna make more than 30kŁ anyway, go through a trust like most traders do. Once your trust has 5m$ or 10m$ or whatever amount is your target, move to Monaco for a year, pay your taxes in Monaco and take the 10m$ out of the trust at Monaco tax rates (which happens to be 0).

That means you won't be able to go to the UK for more than 90 days during that year.

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  #12 (permalink)
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wintergasp View Post
What country are you based in ?

Yes. In the UK Futures is considered capital gain taxes, and will tax you either 18% or 28% depending on whether you're a basic rate taxpayer or not.

I am not a UK tax expert, but UK case law formed a large part of my university studies in tax. I would read this - and here is a section quoted from page 5.

However it is not sufficient simply for there to be a reasonable prospect of gaining money. In the case of gambling on horses and other similar forms of gambling the individual must also have some organisation or associated activity which is sufficient to convert a pastime, hobby or pursuit into a business activity.

If you set up sufficient infrastructure to have a business activity, then it could be considered income. If you trade part-time, then trading profits will most likely be regarded as capital.

In essence, HMRC always leaves itself the option to tax trading income as income rather than capital. I know a UK lawyer who ran a hedge fund some years ago. He was interested in using spreadbetting rather than futures to get his exposure for his personal account. At the time, HMRC would not give any assurances that income from spreadbetting would be tax free. Rather, he was informed that HMRC would assess the merits of each case. The odd thing is that spreadbetting has always been regarded as tax-free in the UK.

I do believe that HMRC is very hesitant to have trading regarded as income since it could mean that trading losses could be offset against other income. So, in essence, they are reducing their workload by not having every single person who loses money gambling or trading trying to offset their losses, while still keeping the door open to tax those who have made it their "trade".

wintergasp View Post
Same thing, if you go through a jersey trust you will only be taxed that amount when you take the money out of the trading account, this way you don't get killed by your losses.

If you've been in london for less than 7 years, then you can be Non-Dom and this doesn't apply if your broker is outside of the UK - you'd be taxed 0% unless you bring some of that money back to a UK bank account.

No comment on the UK non-dom, but with an offshore trust, how do you avoid the anti-avoidance clauses in the UK? Sure, HMRC needs to know about the trust first, but with FATCA, CRS and all the taxpayer info sharing going on, I would not recommend trying to hide the beneficial owner of an offshore trust.

For those who don't know, several Anglo-Saxon countries have exactly the same anti-avoidance clause in their tax law. In essence, if a transaction or a structure reduces the tax burden, and the only reason to have this structure is to avoid taxes, then the tax authority can tax the individual or legal entity as if that structure did not exist. The tax authority can automatically assume any transaction is made with the intent to reduce taxes and the onus is then on the individual to take the tax authority to court and get their assessment set aside. The only way to do this is to prove that the transactions was not only meant to reduce taxes, but that the reduction in taxes is just complementary to the main reason. However, the taxpayer needs to pay their taxes now since they have already been assessed.

So, even if you have a Jersey trust, if HMRC ever set their sights on you, you are looking at potentially being liable for back-taxes, penalties and interest and potentially a rather lengthy and expensive court case. Since I am not a UK tax expert, I cannot recommend the best way to structure your trading, but usually the best way is to keep it simple and transparent.

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  #13 (permalink)
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Please use the existing main tax thread. Search "tax thread"

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