I would have no other job or source income and am a single man. I would not be spread betting but using a Broker where the commission is included in the spread and I would not be buying or selling shares, there would be no dividends. I would make multiple trades per day, 5 days a week, holding a position for as little as 1 minute and up to 2 weeks in duration.
Arthur Weller Replies:
On page CG78300
(www.hmrc.gov.uk/manuals/cgmanual/cg78300.htm) of the HMRC Capital Gains Manual it says:
"Currency other than sterling is a chargeable asset and its disposal can give rise to a chargeable gain or an allowable loss."
In the Business Income Manual page BIM65701 (www.hmrc.gov.uk/manuals/bimmanual/bim65701.htm) it says:
"Transactions by individuals in shares and securities are not generally trading transactions. Such transactions normally fall within the charge to Capital Gains Tax. This is also true of transactions in futures, options or other derivative contracts."
It quotes the tax case of Salt v Chamberlain in which:
"In that case Mr Salt decided to put his expertise in computer technology for forecasting share movements to personal use speculating on the stock market. He effected some 200 purchases and sales of stocks and shares, financing himself by means of bank loans and insurance policies as well as personal means. The Commissioners determined that the Appellant was not trading and Oliver J upheld their decision."
I cannot give you a definitive answer, and I appreciate that the proof that I have brought you from Mr Salt involves shares, not foreign exchange - which is your scenario. But you are not personally doing the trading - you are doing it through a broker. So I think you nevertheless have a good argument to say that your profits (and losses!) should be subject to capital gains tax and not income tax.
