Hi all,
When trading as a retail trader, what taxation laws am I subject to? So for example, if I trade US securities, whilst based in the UK, do I have to pay US taxes? UK taxes? Both? Which types of taxes do I pay? Are taxation laws different for different types of trading, i.e. intraday, long term, super short term?
Thank you!
It's possible to be UK resident under UK tax rules and at the same time be resident in another country under that country’s rules. This is sometimes referred to as dual residence.
Are you UK resident (when you say based in the UK..its not enough)?
if you are UK resident it doesn't matter what you trade, you are subject to CGT capital gains tax. UK shares, US shares, doesn't matter..its all UK tax
one thing that can change this, is whether your gains or losses are under a corporation..ie you've set up a limited company
assuming its not a corporation...
if you trade US shares, you just need to be aware of the W8BEN form as they have a different witholding tax scheme. but this is generally done through your broker, just to make sure they don't tax you..
even if they do, inadvertantly, you can reclaim it back
it doesn't matter your timescale either, its still CGT. but there are other issues to be aware of with regard to frequency such as pattern day trading and the bed and breakfast rule
if you are not UK resident (and being "based" you mean you are here for an extended period of time), then you are subject to your resident country's tax "law" and that's where you'll need to find that out from HMRC or the IRS or whatever country's tax legislative authority you might be subject to.
what do they treat as resident, as it can be different for each one..if i work in switzerland, for example, I am subject to the tax law and rates for that canton (region). if i work in the netherlands, I can only do so under a limited company.
UK tax law fortunately isn't that complicated
hope this helps
