Options trading : Income taxed or CGT?

dennisryanuk · 4 September 2015 at 1:50PM

Afternoon,

Do any gains from options trading count for income tax as well as Capital Gains Tax?

I read that up to £11,000 per tax year is CGT free.

If, for example, I make £5000 trading profit from options in a tax year in a non ISA/SIPP trading account - and earn £50,000 in my day job - do I have to declare this £5000 as income (because I am in higher rate income tax zone)?

Thanks!
Dennis

HappyHarry · 4 September 2015 at 2:42PM

Congratulations! You've had a remarkable turnaround since you were on income related ESA 3 months ago, and were taking a charitable loan to pay for living and re-training costs.

Whatever re-training you had was clearly top-notch. Maybe you could provide an insight to others in need on the Employment, Jobseeking & Training board?

https://forums.moneysavingexpert.com/discussion/5262482

You might be better building up some cash savings first of all, and only start to consider high-risk options trading once you have secured your financial position.

However, to answer your question, options trading would count as Capital Gains (or losses) and not as income.

Malthusian · 4 September 2015 at 3:37PM

As losses can be set against gains, and you are almost certainly going to lose your shirt, the issue of capital gains tax is fairly unlikely to arise.