How Complicated Is/Are Tax Reporting/Returns?

[Nowler]

Hey folks!

The simple question is, generally speaking, how easy is it to do my UK tax reporting/file tax returns for a Stocks & Shares portfolio, and CFD trading account?
I am not very mathematically gifted, though I can use a calculator lol


To make this more complicated:

Is there any difference from the general if we factor in things like:

- I am Irish living in the UK
- My stocks and share portfolio only holds US, Canadian, and Australian assets (no UK)
- I believe I am non-domicile in the UK as I am not here long, and don't plan on being here past 2025

Do any of the above change things, or...?

Thanks in advance.


Oh & PS...
When doing my tax returns, I only need bottom line gains, losses, interest & dividends right?
I don't need to trawl through all my buys & sells?

 

[Nowler]

Anyone got anything to say on this?

 

[Atilla]

Anyone got anything to say on this?

Hi Nowler,

Have you tried the Which Tax Calculator. Somewhile back they used to have a software that did it all for you and submitted to gov.uk site at the click of a button.

https://www.which.co.uk/money/tax-c...lc&utm_content=button-cta&utm_term=income-tax

All the forms were available and they had lots of good advice and answers to questions. Context-sensitive help was really good too.

Otherwise would advise you find a good accountant. I always say a good solicitor or accountant expense is money well spent.


ATB

 

[BigDeal]

Have you been sent a request from HMRC to complete a tax return?

 

[Nowler]

Hi Nowler,

Have you tried the Which Tax Calculator. Somewhile back they used to have a software that did it all for you and submitted to gov.uk site at the click of a button.

https://www.which.co.uk/money/tax-c...lc&utm_content=button-cta&utm_term=income-tax

All the forms were available and they had lots of good advice and answers to questions. Context-sensitive help was really good too.

Otherwise would advise you find a good accountant. I always say a good solicitor or accountant expense is money well spent.


ATB

Hello mate!
Oh wow! I didnt know this was a thing...
Thanks very much for the info!

After a quick look at the link it seems perfect for a pleb like me

Do you know if it matters that my portfolio only holds stocks/shares from non-UK companies?
Would I be liable for the same amount regardless?

Ive taken note of you last comment about a good accountant/sols.
I've see the difference between good and bad solicitors through my place of work, lol

 

[Nowler]

Have you been sent a request from HMRC to complete a tax return?

Hey mate,

Nope, I have not.
Just thinking ahead/am curious

 

[BigDeal]

I am not an accountant, but I an in Self Assessment and complete a return every year. This is what I think:

You are not on their radar, but I'm pretty sure you would have to declare if you've made capital gains in excess of last years allowance (£12,300). You would also then have to record your dividends. although you've probably paid tax on these in the associated countries already so wouldn't be taxed further as I'm sure the UK has a reciprocal tax arrangement with the countries you mention.

As for your resident status - well, I studied this years ago, and it was complicated then, so not sure what the score is now, but there may well be different rules for you based on your residency and domicile status.

Your PS is correct, you do not have to list all trades separately for HMRC, but would need the detail if they queried your figures - I know this bit from experience

 

[Nowler]

I am not an accountant, but I an in Self Assessment and complete a return every year. This is what I think:

You are not on their radar, but I'm pretty sure you would have to declare if you've made capital gains in excess of last years allowance (£12,300). You would also then have to record your dividends. although you've probably paid tax on these in the associated countries already so wouldn't be taxed further as I'm sure the UK has a reciprocal tax arrangement with the countries you mention.

As for your resident status - well, I studied this years ago, and it was complicated then, so not sure what the score is now, but there may well be different rules for you based on your residency and domicile status.

Your PS is correct, you do not have to list all trades separately for HMRC, but would need the detail if they queried your figures - I know this bit from experience

Thanks for the input mate!

The taxable stocks/shares I own are through a European broker, and are for Canadian, Australian and US companies.
The dividends wont be an issue this time around for sure as it won't exceed this years allowance for my taxable accounts.

CGT might not be an issue next time around anyway, but I cannot say that for sure.
I just thought it best to get up to speed with this stuff now before it becomes an issue.
Particularly as I don't quite understand how things may vary since I am an Irish citizen, living in the UK for a relatively short time, with no UK stocks in a European brokerage account.

In regards to listing all my trades - hopefully they never ask. Then again, my broker should be able to provide a neat list of buys and sells.

Thanks again for taking the time to comment

 

[Parky]

The main factor is this. Is your main income derived from your trading? If you are trading for a living you have to pay tax. Anyone who thinks they can earn and making a living without paying any tax is totally deluded.

 

[Nowler]

The main factor is this. Is your main income derived from your trading? If you are trading for a living you have to pay tax. Anyone who thinks they can earn and making a living without paying any tax is totally deluded.

You have to pay taxes on trading income if you dont trade for a living too...
Provided you made a certain amount of profit of course

 

[tomorton]

If you use a spreadbetting account in the UK to trade there will never be any tax liability. You don't even have to report the winnings to HMRC.

 

[Parky]

Not true. Nobody in the UK can earn a living tax free regardless of the source or instruments involved. If your principal source of income is trading, wether it be spreadbetting, CFD's or straight gambling you will have to pay tax. Anyone who thinks they can earn a living in the UK without making a tax contibution needs to to take professional tax advise....FAST.

 

[Parky]

Selling Lego on Ebay, is that taxable? No.
Make a living from selling Lego on ebay is that taxable? Yes.
Casual spreadbetting via a platform taxable? No.
Make a liviing from Spreadbetting via a platform taxable? Yes.
Big difference.

 

[1nvest]

Not again, how many times!

Difference between Spread betting and CFDs

I understand SB is being marketed as tax-free opposed to CFDs, but is that the only difference? I'm a novice and looking to have a punt at day trading and want to understand the SB/CFD difference before looking for a suitable broker.

www.trade2win.com

Just read this thread, i needn't repeat myself.

 

[Parky]

Yep my sentiments exactly. Anyone who expects to earn a living in the UK and pay no Tax can expect a big bill (or worse). Regardless of the instrument you are trading.

 

[tomorton]

Not true. Nobody in the UK can earn a living tax free regardless of the source or instruments involved. If your principal source of income is trading, wether it be spreadbetting, CFD's or straight gambling you will have to pay tax. Anyone who thinks they can earn a living in the UK without making a tax contibution needs to to take professional tax advise....FAST.

There is not a single reported incidence of any trader paying tax on spreadbetting gains.

 

[Parky]

Again, you miss the point. If you are spreadbetting casually or it is not your main source of income then you wouldnt. If you are trading for a living you would. The fact you main income is derived from Spreadbetting is immaterial. If you truly believe you can earn a livivng in the UK tax free you are deluded or have taken some very bad tax advise. "If you’re living and working in the UK, or have taken up UK retirement, you are liable to pay UK taxes. " HMRC

 

[Parky]

If you sell a car on ebay is it taxable? No
If you make a living selling cars on ebay is it taxable? Yes
Same difference

 

[tomorton]

Again, you miss the point. If you are spreadbetting casually or it is not your main source of income then you wouldnt. If you are trading for a living you would. The fact you main income is derived from Spreadbetting is immaterial. If you truly believe you can earn a livivng in the UK tax free you are deluded or have taken some very bad tax advise. "If you’re living and working in the UK, or have taken up UK retirement, you are liable to pay UK taxes. " HMRC

This is a very common perception of spreadbetting and tax. Its a reasonable assumption that the UK government would not offer such a tax-free advantage. All I can say is that while we each have our own opinions, we would each need some evidence for us to change our respective positions.

Do you point to a trader who has paid tax on spreadbetting gains?

On the other hand I can point to a trader who has derived their main income from trading and who has not paid tax on spreadbetting gains - me.

 

[Parky]

If you ask a qualified accountant, "do I have to pay tax on my spreadbetting" he will say "No"
Ask the same guy, "If I trade for a living and my main source of income is spreadbetting, do I pay tax on the income?
He should say "Yes".
Totally different questions.
But you are right, people have to do their own investigations and it is important people do that.
We have over thirty traders and when this tax "wheeze" first appeared many traders made the transition from trading outright to manufactured spread bets on the understanding that this tax "wrapper" would do just as you have indicated. Make their trading tax free.
On paper it did, but as I have pointed out traing in this way does not change the obligation to pay tax on your principal income. So yes to answer your question all of our traders pay tax on their principal income.
Not having paid tax is not proof in itself that you should not have been paying it.
It just means you have got away with it thus far. Good luck with that.