Hi ,
I have seen many different case on the forum but i couldn't find any that fits to my profile .
Im planning to start live trading with a CFD broker. i live and work in the uk also employee of a company and earn approx. 15-16 k / annum. if i make lets say 500-1000 ponds profit or loss how do i pay tax after that? after loss i dont pay tax but i can offset it next year assumedly.
I trade only options but does it really matter what is the underlying since it is CFD i owe the gain or loss i made on the contracts . is it right?
im planning to execute trades 3-4 times a week and not holding them longer than a day or two.
i would trade as a hobby not for business.
I found this example on gov.uk and from that point I am confused
"Example
Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £12,100.
First, deduct the tax-free allowance of £11,100 from your taxable gain. This leaves £1,000 to pay tax on.
Add this to your taxable income. Because the combined amount of £21,000 is less than £31,785 (the basic rate band for the 2015 to 2016 tax year), you pay Capital Gains Tax at 18%.
This means you’ll pay £180 in Capital Gains Tax."
"The standard Personal Allowance is £11,000, which is the amount of income you don’t have to pay tax on."
"You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount). The tax-free allowance is £11,100"
( both from gov.uk )
So are there taxable income and taxable gains with different allowances ? in that case i dont pay tax on that small amount of gain ... but that would be too easy and sounds too good
Any advice, comment would be appreciated .
Thank u
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