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Where Taxpayers and Advisers Meet

what constitutes share trading?

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Posts:351
Joined:Thu Feb 23, 2012 10:26 am
what constitutes share trading?

Postby Feedback » Tue Mar 21, 2017 12:13 pm

we have a client that has a share portfolio and the frequency of trades is such that this could be considered more than just an individual making an investment. what are the rules that determine whether the profit is covered by TCGA or ITEPA (or similar)?

The client portfolio has increased through a high volume of trading activity in the past year and the question is whether the share sales that derive the profit are all subject to CGT, given the proceeds have been re-invested into new shares

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Posts:351
Joined:Thu Feb 23, 2012 10:26 am

Re: what constitutes share trading?

Postby Feedback » Tue Mar 21, 2017 12:20 pm

I've answered it myself. there is plenty of case law that determines this is an investment and not a trade ergo subject to CGT rules.

Ian McTernan CTA
Posts:1232
Joined:Wed Aug 06, 2008 3:02 pm
Location:Bedford
Contact:

Re: what constitutes share trading?

Postby Ian McTernan CTA » Tue Mar 21, 2017 4:26 pm

It's actually quite hard to be treated as a share trader as a trade rather than an investor.

There's a very good reason for that- over the longer term, most private share traders don't make much money from it or indeed generate losses, which as a trade could be set against their main income but as capital losses generally can't!

They can get lucky for a few years but unless they are doing it pretty much full time then eventually the law of averages catches up with them.

I've known a few successful traders, but they tend not to just stick to shares and will trade almost anything and will be at it full time.
McTernan Associates Ltd
Chartered Tax Advisers
Bedford
Email through link on website:
http://www.imcternan.com


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