UK investors and their tax problem

[YvesT]

I was wondering if anybody has some good advice regarding tax issue's in the UK.
Like for a example i got interested client, who wants to start investing.
But his problem he lives in the UK and has to pay 40% tax on his profit.
He has a offshore account, but this has become risky as well.
http://www.ifaonline.co.uk/public/sh...ml?page=453493

Now i was hoping somebody knows more then me regarding this.
Or maybe somebody knows a place that can give me some help regarding this.

40% tax on your profit is a lot.
Yeah you can not tell about it, but if you end up getting caught.
You risk a jail time and 200% from your profit you did not declare.

Any help is much appreciated.

[Trevman]

hes allowed £8,500 tax free, but if profit is that good id say take up spreadbetting and the profits are tax free

[YvesT]

Originally Posted by Trevman

hes allowed £8,500 tax free, but if profit is that good id say take up spreadbetting and the profits are tax free

£8,500 tax free a year on investment profit ? or total ?

sorry but what is spreadbetting ?

[popoola]

Spread betting is a method of investing in the uk. at the moment its profits are tax free because it is considered betting like poker wins. However the price of the best of the spreadbetting firms closely mirror what is out there in the real world and spreads are similar. It is a great way to trade and it comes into its own if you are profitable. Even if you make billions you can decide to count it in front of the inland revenue office. They cant touch you. Google it and see where it takes you

[Trevman]

£8,500 on investments only, so stocks, shares, forex etc

[TRADE]

the last time I looked into spreadbetting as a way of bypassing the tax on profits, i realised that you indirectly payed your tax dues to the market by way of the large spreads the firms where charging,

eg, lets say one forex broker is charging 1pip spread on the euro and a spreadbetter is charging 4pips and tauting tax free, on 1 lot traded, you are giving $40 to the market and on the other just $10, now given that you may pay tax trading with the former broker this may equate to approximately the same if not slightly more than that which you have already lost in the spread of the latter. Now given that the former may be a more reliable broker with a better platform, more flexibility to trade and a better data stream it may be worth trading here, in such a situation this sort of settup could also mean the difference between making a profit at all. I remember looking at forex on tradindex and the spreads where like 8 pips,

This may have changed since but given the large spread and the not so reliable platforms, data feeds of the spreadbetting firms, I would choose to have my profits taxed. at least I am contributing to my pension

It all depends on your financial circumstance, if you trade for a living, then 40% only kicks in when you start earning a certain amount of money, like a regular high paying job here in the UK.

[Trevman]

1pip spread at http://www.cantorindex.co.uk/index.jsp

[YvesT]

Originally Posted by TRADE

the last time I looked into spreadbetting as a way of bypassing the tax on profits, i realised that you indirectly payed your tax dues to the market by way of the large spreads the firms where charging,

eg, lets say one forex broker is charging 1pip spread on the euro and a spreadbetter is charging 4pips and tauting tax free, on 1 lot traded, you are giving $40 to the market and on the other just $10, now given that you may pay tax trading with the former broker this may equate to approximately the same if not slightly more than that which you have already lost in the spread of the latter. Now given that the former may be a more reliable broker with a better platform, more flexibility to trade and a better data stream it may be worth trading here, in such a situation this sort of settup could also mean the difference between making a profit at all. I remember looking at forex on tradindex and the spreads where like 8 pips,

This may have changed since but given the large spread and the not so reliable platforms, data feeds of the spreadbetting firms, I would choose to have my profits taxed. at least I am contributing to my pension

It all depends on your financial circumstance, if you trade for a living, then 40% only kicks in when you start earning a certain amount of money, like a regular high paying job here in the UK.

That's the thing, he already earns to much(wel it never is to much) so he has to pay 40% tax.
Before you could somewhat use a offshore account to avoid tax.
Now you can't, at least no risk free.
Question ofcourse is, how big is the chance you get caught if you use a offshore account.
One thing is for sure he does not want to pay 40% tax on his profit
paying 200GBP on 500GBP profit is a lot in my opinion.

But as said if it stays below the 8000GBP a year then he does not have to worry.
But eventually he will have to if he reinvests his profit.

It's going to be hard to figure out something for that