Daytrading stocks

Hi, I would like to ask how to report gains from daytrading stocks/shares. Is it a capital gains tax or an income tax? How is the distinction between daytrading and investing made? Many thanks.

Hi,

Whether you’re classed as a day trader or an investor could make a serious difference to your tax obligations.

The crucial distinction is that a ‘trader’ will not hold on to shares in the long-term. Whereas, an investor will hold shares for use as assets to then generate revenue, dividend income for example.

This is important because a stock trader will often pay Income Tax, whilst an investor will more likely pay Capital Gains Tax.

Thank you.

Thanks for the response, can you clarify how i should report any gains as a trader? Do i just make the distinction myself and report as income or do i communicate this with HMRC? Thanks

Hi GeorgeDimmy,
Please refer to Report and pay your Capital Gains Tax#.
Thank you.
 

Hello, I’m not from this country, I have a permit job visa , do I have to pay taxes if I do day trading?

Hi Neftali Pena rodriguez,
Yes, it can be Capaital Gains Tax on profits or Income Tax if you class this as an actual trade
Please see help here:
BIM56850 - Financial traders - instruments and shares: case law and individuals
Thank you. 

Hi, May I know whether am I classified as a "Trader" or "Investor" if in the tax year of 2023 to 2024 I disposed 450 transactions of stocks, future, options and foreign currency at the amount of over £2.5 millions for the purpose of profit making and majority of the transactions are day-trading? Should I report my profits or loss as "Income Tax" or "Capital gains Tax"? Thank you

Hi,
Please have a look at the guidance at BIM56810:
(Business Income Manual).  
This is something you will need to decide on.
Thank you.

Hi, Trading shares, securities, options, currencies or futures involve no VAT, thus an individual day trader is exempt from VAT registration even the annual turnover exceeds £85,000. Is my understanding correct? Thanks

Hi, All the transactions of my Day trading are non-UK shares and executed via an online broker outside the UK. Shall I declare that Business is carried on abroad? If yes, is my Day Trading business exempt from VAT obligations? Thanks

If the gains made from daytrading are via a CFD or Spread betting account then the gains are classed as gambling (as for the most part that is what day trading is!) ... so would not be classed as income or capital gain? This is also based on the fact that the underlying asset is not actually purchased by the trader.

Hi Siu Chan,
You can see the guidance here:
VAT Notice 701/49: finance
Thank you.

Hi Siu Chan,
Please refer to BIM22015 - Meaning of trade: exceptions and alternatives: betting and gambling - introduction
Thank you.