I need a little tax advice

Juggles5

Afternoon chaps.

I have a question about taxation for those trading digitally.

First off, I am on job seekers allowance at the moment and due to the lack of jobs, I am going to start trading online. Essentially I used to buy and sell domain names as well as websites so I'm well aware that I can make some very good money doing so as a way of getting off benefits.

The domains I will be buying will range from $10 - $100 and I will be selling them for a minimum of ten times the purchase price. (current exchange rate is about 0.6 GBP to 1 USD)

Now my question is, a domain name being a digital asset and me not earning any income on it as such, this should be deemed as a capital gain for taxation purposes and CGT paid rather than income tax is that correct?

Thank's very much for the help, I asked a few financial advisers about it and they are not yet in the digital age.

Dave.

Dexters_Indignation

As this guy


http://www.bbc.co.uk/news/uk-england-dorset-18592468

Dexters_Indignation

Or ask this guy


http://www.bbc.co.uk/news/entertainment-arts-18569728

Juggles5

Not sure what relevance housing benefit fraud and off-shore trust loans has on CGT but thank you all the same, your input is erm .... appreciated.

sweetietot

Surely if you are buying the domains for x and selling at 10 times the purchase price then you are making a profit/income and running a business?

Pennywise

If you're buying with the intention of selling for a profit, it's not capital gains, it's trading, which is subject to tax and NIC. You have to notify HMRC when you start trading, to register as self employed.

Juggles5

Pennywise wrote: »

If you're buying with the intention of selling for a profit, it's not capital gains, it's trading, which is subject to tax and NIC. You have to notify HMRC when you start trading, to register as self employed.

Perfect thank you Pennywise. I have already registered with HMRC.

I appreciate the advice.

00ec25

Juggles5 wrote: »

I appreciate the advice.

?
Pennywise's advice is the one to listen to, under HMRC rules you are trading, so,... Income Tax not CGT. You are a self employed business owner

olivetti

The website domain names are the trading stock of your business, you are purchasing them with an aim of resale for profit and do not intend the use them in order to create income within the business. The fact that they are intangible and not tangible in nature is irrelevant.

The facts as you describe lead me to believe that you are a trader in web domains and will be chargeable to income tax on the taxable profits of your venture.

Juggles5

olivetti wrote: »

The website domain names are the trading stock of your business, you are purchasing them with an aim of resale for profit and do not intend the use them in order to create income within the business. The fact that they are intangible and not tangible in nature is irrelevant.

The facts as you describe lead me to believe that you are a trader in web domains and will be chargeable to income tax on the taxable profits of your venture.

Just to be clear on this point, there is no attached website nor ongoing business. It acts purely as an asset, like a car or a painting rather than a business I buy, work on and sell at a later date.

As I understand it from reading above and using cars as the tangible alternative. I would be a car dealer, I buy the car at auction, give it a place on my yard and advertise it, the buyer then comes along and purchases it. The fact that the capital value increases doesn't subject it to CGT is a good one. I though because it was purely an asset that has risen in value it could be subject to it.

Thank you all for the responses, I really appreciate them.