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Where Taxpayers and Advisers Meet

CGT on margin posted in USD for CME futures account

MityaG
Posts:1
Joined:Sun Aug 27, 2017 9:25 pm
CGT on margin posted in USD for CME futures account

Postby MityaG » Sun Aug 27, 2017 9:55 pm

Hi All,

I have an account with Interactive Brokers denominated in the USD. It allows me to trade CME futures and manages margin calls automatically. I would like to understand how should I report FX capital gains tax to the HMRC on the margin calls.
In the example below:
day1 666.67 GBP was converted into $1000
day2 $500 was posted to CME as a margin call
day3 $500 was returned back to my account
day4 $1000 was sold to get back 689.66 GBP

USD__FX Rate___GBP____Method1___Method2__Time
1000___1.50____666.67___0.0000____0.0______ day1 Bought USD Cash
-500___1.60____-312.50__-20.8333___0.0______ day2 Magin for US futures posted
500____1.40____357.14___0.0000____0.0______ day3 Magin for US futures returned
-1000___1.45___-689.66__-0.8210___22.989____ day4 Sold USD Cash
________________Net PnL-21.6544__22.989

My question is should margin call transaction be accounted for HMRC Tax purposes as disposal of a chargeable asset?
1) If that's the case then even though PnL on the futures transaction was exactly 0 and all posted margin was returned it would subject to CGT due to FX move from 1.6 to 1.4 between day2 and day3. This calculation was done in Method1 column.
Alternatively,
2) Margin posting does not constitute a disposal of an asset and hence should be skipped for the purpose of CGT calculation.

Many thanks, I would appreciate a reply.

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