Stock trader
Lina
Registered Posts: 41 Regular contributor ⭐
I have a new client , he traded all year as a stock trader. Not registered with HMRC . I mean he never completed a tax return before.
Made profits of 20K in 2010-2011.
Not sure what type of income that is. Shall i complete SE pages on the tax return and call it a stock trade? Or maybe there is smth else?
Any suggestions? Thanks
Made profits of 20K in 2010-2011.
Not sure what type of income that is. Shall i complete SE pages on the tax return and call it a stock trade? Or maybe there is smth else?
Any suggestions? Thanks
0
Comments
-
How does he trade stock?
Some methods such as spread betting aren't taxable!0 -
He has an account with TD Waterhouse where he invested some money. He buys and sells different companies shares. Every quarter he gets a summary from TD Waterhouse about his profits.0
-
Its capital gains not income tax.0
-
If he's doing it with the intent to make short-term profits, it could be classed as self employment and trading income - couldn't it?0
-
that is why I am not sure. Capital gains or se profits.This is a daily trade and not that he gained profit for selling one or few companies shares. During a month he buys and sells many.It would even be impossible to calculate which companies shares made profits.
Once I had similar question about profits from sale of houses. If you sell one house and make a profit , then it is capital gains tax. But if you do business of buying and selling houses and you have few sales in a year then it classifies as a trade. And it does make sence. I aksed in HMRC in one of their events.
I hope I will get more suggestions.
Thank you0 -
If you sell one house and make a profit , then it is capital gains tax. But if you do business of buying and selling houses and you have few sales in a year then it classifies as a trade. And it does make sence. I aksed in HMRC in one of their events.
Note Spread Betting was previously mentioned. As this is gambling, it's always tax exempt I believe.0 -
-
what do you mean - what type of account he uses? Does it make a difference?
I do not think that there is a question of whether it is taxable or not. 100 % it is. Question is : how to treat this income?
thanks0 -
Lina,
It seems that you ignored my post completely, share trading is always subject to capital gains unless you are a registered trader i.e. member of Stock Exchange.0 -
-
what do you mean - what type of account he uses? Does it make a difference?
I do not think that there is a question of whether it is taxable or not. 100 % it is. Question is : how to treat this income?
thanks
Yes its makes a difference, many "day traders" use spread betting and other similar methods to trade stocks, currencies, futures etc.
So no, it isn't 100% definite unless you know the answer to this!0 -
Agree with PGM. Be very careful to understand exactly what these transactions are, it could well be the client is not actually buying and selling shares but effectively betting on the movement of individual share prices. Have a look at the documentation very closely. If he is buying and selling shares then probably there would be an annual tax summary provided by the stock broker. Careful, as would be easy to mess up big time on this.0
-
Thanks for your answers. I called HMRC and they told me to tax under CG.
I will talk to the client and see if he bets on the shares or buys them. It is not as simple as i thought in the beginning.
Thanks to all the comments/ learned a lot0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 321 NEW! Qualifications 2022
- 164 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership