This is my first post here, so apologies if it is in the wrong forum.
I am based in the UK looking to trade american stocks (NASDAQ and NYSE). Typically I'll be making 3-5 trades per day and not holding the stocks for longer than a couple of hours. I expect each trade will total around £20,000-£40,000 worth of shares. I'll be using a margin account too.
I contacted HMRC regarding tax and capital gains and they sent the following back:
A charge to Stamp Duty Reserve Tax (SDRT) under FA86/S87 arises where a Person (A) agrees with another Person (B) to transfer chargeable securities (whether or not to Person (B) for consideration in money or money’s worth. The charge applies:
• whether or not there is an instrument or other document is executed completing the transfer.
• whether or not settlement of the transfer takes place.
• whether or not the agreement to transfer is made or effected in the UK or overseas; and
• regardless of whether the parties to the agreement to transfer re resident in the UK or elsewhere.
The principal charge to SDRT is at the rate of 0.5% of the amount or value of the consideration paid in money or money’s worth.
I can confirm that SDRT is applicable each time that you purchase UK chargeable shares, whether you sell them an hour later or not.
This technically means that each day I'll owe up to £1,000 in capital gains.. Surely this cannot be right? Given that I expect to only make around £400 profit per day. Does anyone else day trade in the UK that can offer some guidance on this? HMRC seemed very unsure of the answer.
Any help would be much appreciated. I'm a deaf academic looking for to try another source of income that doesn't involve awkward meetings