Trading 212

wmb194

You seem to be overthinking this. If you’re a basic rate taxpayer investing/gambling with what sounds like small* amounts of money you barely need to worry. Just use something like Microsoft Money to keep track of your trades, interest, dividends and PIDs. PIDs, paid by REITs, are paid net of 20% tax so you don’t need to worry about these and for the rest you’ll probably be within your annual allowances anyway. You shouldn’t give up on what could be a profitable activity because you’re afraid of a little record keeping.

Even if you had to do it, filling in a self-assessment tax return isn’t particularly hard either, particularly if you have good records and MS Money can produce tax reports to give you the numbers.

*”... not sure it would be worth it based on the amount I am free to invest at the moment either way”

bowlhead99

Bowsa said:

I suspect a financial advisor would likely be the only way to go about this, though is there a provider that would advise me through all this IF i were to look into stocks and shares seperately from an ISA.......

or how much could I expect to pay for a FA - not sure it would be worth it based on the amount I am free to invest at the moment either way, the sooner I start to learn about these things the better.

You can hire an accountant if you want to know what records to keep for a tax return or how to complete one. There are plenty of accountants that do personal tax.

If you have a couple of hundred thousand to invest, you could speak to an independent financial adviser and they might charge you 1-2% up front and half a percent ongoing to advise on building and implementing an investment portfolio to use your tax allowances and meet your long term goals. They would use regulated investment products (i.e. funds which invest broadly) to do that, not try to advise you on how to pick individual stocks on Trading 212.  If you have less money than that, it is more likely to cost you more as a percentage of the pot, to buy advice.  If you are looking for a financial adviser, look for an IFA (rather than an FA), as an Independent FA is able to find you a solution from all the solutions on offer, rather than advise you on the limited range of products that he or his affiliates have for sale. 

Building a portfolio that allocates capital across the major asset classes (whether in pension, ISA... - or unwrapped if you have more money than will fit into those allowances) is something that's useful to grow your wealth over the long term to meet your goals and eventually allow you to retire and live off it when you no longer have a job. Buying some shares in individual companies that you fancy on Trading 212 is a hobby at best, even though it looks like fun.

There are plenty of resources and blogs for beginner investors to understand how to build a portfolio of investments, and you probably took some of that advice when deciding to invest regularly into a Vanguard fund. However, the resources which talk you through 'what stocks to buy' and 'how to trade' are pretty much the wild west of investing, and full of obvious and not-so-obvious vested interests.  For most people, a zero commission broker that allows them to trade small amounts of stock in individual companies, is not something they actually need, because they do their real-money investing in a balanced mix of funds and ETFs. 

If you 'fancy a flutter', sure, use T212, but you could equally use IG.com for some financial spreadbets (no tax consequences on betting, so no records to keep), or Betfair.com to take a punt on the Belarusian Premierleague (not much sport on at the moment but there is probably money to be made if you are willing to put in the research and can figure out the fair price better than the other market participants).

Bowsa

wmb194 said:

You seem to be overthinking this. If you’re a basic rate taxpayer investing/gambling with what sounds like small* amounts of money you barely need to worry. Just use something like Microsoft Money to keep track of your trades, interest, dividends and PIDs. PIDs, paid by REITs, are paid net of 20% tax so you don’t need to worry about these and for the rest you’ll probably be within your annual allowances anyway. You shouldn’t give up on what could be a profitable activity because you’re afraid of a little record keeping.

Even if you had to do it, filling in a self-assessment tax return isn’t particularly hard either, particularly if you have good records and MS Money can produce tax reports to give you the numbers.

*”... not sure it would be worth it based on the amount I am free to invest at the moment either way”

I don't know if I am or i'm not - because I don't know the subject fully.

I am not sure how T212 for example outlines anything or makes it clear in terms of what is share rises / dividends / etc etc... I also don't know what specifically I would need to declare to the tax office and by what means (CGT / SA form) or in fact what either of those forms look like. 

something that I assume adds complication is the fact that I have a company car and so while I'm basic rate, I am not simply a 1250L (or whatever it maybe at this stage code)......
??

wmb194

Bowsa said:

wmb194 said:

You seem to be overthinking this. If you’re a basic rate taxpayer investing/gambling with what sounds like small* amounts of money you barely need to worry. Just use something like Microsoft Money to keep track of your trades, interest, dividends and PIDs. PIDs, paid by REITs, are paid net of 20% tax so you don’t need to worry about these and for the rest you’ll probably be within your annual allowances anyway. You shouldn’t give up on what could be a profitable activity because you’re afraid of a little record keeping.

Even if you had to do it, filling in a self-assessment tax return isn’t particularly hard either, particularly if you have good records and MS Money can produce tax reports to give you the numbers.

*”... not sure it would be worth it based on the amount I am free to invest at the moment either way”

I don't know if I am or i'm not - because I don't know the subject fully.

I am not sure how T212 for example outlines anything or makes it clear in terms of what is share rises / dividends / etc etc... I also don't know what specifically I would need to declare to the tax office and by what means (CGT / SA form) or in fact what either of those forms look like. 

something that I assume adds complication is the fact that I have a company car and so while I'm basic rate, I am not simply a 1250L (or whatever it maybe at this stage code)......
??

That’s just an adjustment to your tax code to collect tax on a benefit in kind, it doesn’t mean that you’ll lose your other allowances.
Trading212 isn’t special. Whichever platform you use a share is a share, a capital gain or loss is calculated at the point you sell and a dividend is a dividend. If you’re a basic rate taxpayer and within the allowances and haven’t traded more than 4x the annual CGT allowance then you don’t have to declare anything. If you’re only talking about small amounts of money anyway I really wouldn’t worry.

Bowsa

wmb194 said:

You seem to be overthinking this. If you’re a basic rate taxpayer investing/gambling with what sounds like small* amounts of money you barely need to worry. Just use something like Microsoft Money to keep track of your trades, interest, dividends and PIDs. PIDs, paid by REITs, are paid net of 20% tax so you don’t need to worry about these and for the rest you’ll probably be within your annual allowances anyway. You shouldn’t give up on what could be a profitable activity because you’re afraid of a little record keeping.

Even if you had to do it, filling in a self-assessment tax return isn’t particularly hard either, particularly if you have good records and MS Money can produce tax reports to give you the numbers.

*”... not sure it would be worth it based on the amount I am free to invest at the moment either way”

Its not that I'm afraid to keep the records, but I don't understand it - thats my concern. I also know that the tax man isn't someone you want to mess with.......if I fill it in wrong, I understand that the fines can be substancial.

Bowsa

wmb194 said:

Bowsa said:

wmb194 said:

You seem to be overthinking this. If you’re a basic rate taxpayer investing/gambling with what sounds like small* amounts of money you barely need to worry. Just use something like Microsoft Money to keep track of your trades, interest, dividends and PIDs. PIDs, paid by REITs, are paid net of 20% tax so you don’t need to worry about these and for the rest you’ll probably be within your annual allowances anyway. You shouldn’t give up on what could be a profitable activity because you’re afraid of a little record keeping.

Even if you had to do it, filling in a self-assessment tax return isn’t particularly hard either, particularly if you have good records and MS Money can produce tax reports to give you the numbers.

*”... not sure it would be worth it based on the amount I am free to invest at the moment either way”

I don't know if I am or i'm not - because I don't know the subject fully.

I am not sure how T212 for example outlines anything or makes it clear in terms of what is share rises / dividends / etc etc... I also don't know what specifically I would need to declare to the tax office and by what means (CGT / SA form) or in fact what either of those forms look like. 

something that I assume adds complication is the fact that I have a company car and so while I'm basic rate, I am not simply a 1250L (or whatever it maybe at this stage code)......
??

That’s just an adjustment to your tax code to collect tax on a benefit in kind, it doesn’t mean that you’ll lose your other allowances.
Trading212 isn’t special. Whichever platform you use a share is a share, a capital gain or loss is calculated at the point you sell and a dividend is a dividend. If you’re a basic rate taxpayer and within the allowances and haven’t traded more than 4x the annual CGT allowance then you don’t have to declare anything. If you’re only talking about small amounts of money anyway I really wouldn’t worry.

I am starting to get confused by this - someone above said that as long as your not making £12.5k a year you don't need to fill in a CGT though if you are receiving dividends etc then you would need to do a self assesment as this is classed as income.

what do you mean by 4x the annual CGT allowance?
can anyone reccomend / give me a link to where this is laid out on HMRC or a resource where it is outlined?

I don't want to give up on this, but if feels like a lot of effort for minimal gain atm 

wmb194

You worry far too much. With only small amounts invested or speculated the chances are that you'll be nowhere near any of the reporting thresholds* and if you only owe small amounts of money and any mistakes are honest you don't need to worry about HMRC either. If this is going to worry you so much you should just stick to a stocks and shares Isa.

*£2,000 p.a. allowance for dividends, £12.3k p.a. capital gains AEA, 4x the AEA of the value of shares sold p.a.

Bowsa

wmb194 said:

You worry far too much. With only small amounts invested or speculated the chances are that you'll be nowhere near any of the reporting thresholds* and if you only owe small amounts of money and any mistakes are honest you don't need to worry about HMRC either. If this is going to worry you so much you should just stick to a stocks and shares Isa.

*£2,000 p.a. allowance for dividends, £12.3k p.a. capital gains AEA, 4x the AEA of the value of shares sold p.a.

So untill I get:
 £2,000 in dividends 
£12,300 in sold shares 

I don't even need to declare anything?

wmb194

Bowsa said:

wmb194 said:

You worry far too much. With only small amounts invested or speculated the chances are that you'll be nowhere near any of the reporting thresholds* and if you only owe small amounts of money and any mistakes are honest you don't need to worry about HMRC either. If this is going to worry you so much you should just stick to a stocks and shares Isa.

*£2,000 p.a. allowance for dividends, £12.3k p.a. capital gains AEA, 4x the AEA of the value of shares sold p.a.

So untill I get:
 £2,000 in dividends 
£12,300 in sold shares 

I don't even need to declare anything?

Yes, as a basic rate taxpayer you won't need to declare anything and your overall annual capital gain = profits - losses from realised trades, so this doesn't include paper profits or losses. The value of shares sold will be >£49,200.

bowlhead99

Bowsa said:

wmb194 said:

Bowsa said:

wmb194 said:

You worry far too much. With only small amounts invested or speculated the chances are that you'll be nowhere near any of the reporting thresholds* and if you only owe small amounts of money and any mistakes are honest you don't need to worry about HMRC either. If this is going to worry you so much you should just stick to a stocks and shares Isa.

*£2,000 p.a. allowance for dividends, £12.3k p.a. capital gains AEA, 4x the AEA of the value of shares sold p.a.

So untill I get:
 £2,000 in dividends 
£12,300 in sold shares 

I don't even need to declare anything?

Yes, as a basic rate taxpayer you won't need to declare anything and your overall annual capital gain = profits - losses from realised trades, so this doesn't include paper profits or losses. The value of shares sold will be >£49,200.

what if you're no longer a basic rate tax payer?

Everyone has different financial affairs.  If you're trying to avoid getting bogged down in the detail of every possible combination of what could happen to every taxpayer with every type of personal circumstance, it is best to just focus on your own personal circumstances.

If you are a simple basic taxpayer earning comfortably less than the higher rate threshold and you don't get more than £2k of dividends or £12.3k of capital gains in a tax year, and you aren't required to do a self assessment form for any reason (or you are required to do self assessment, but you don't have sales proceeds of over £49.2k), then you will not need to tell HMRC about your investing results, unless you want to claim losses to carry forward to future years.

However, if you were a higher earner, you should be aware that although the first £2k of dividends have a tax rate of 0%, they are still seen as 'income' for the purposes of tax rules. So for example if you have £49k of salary and £1.5k of dividends, you wouldn't be paying tax on the dividends, but the fact that you now have total income over the £50k higher rate threshold means that your personal savings allowance for interest income reduces, and you could be on the hook for some child benefit clawback if you or your partner have been claiming it. Similarly if you have £99.9k of salary and other income and then you get £200 of dividends, there's no tax to pay on the dividends but you have now moved to total of income of over £100k and will lose some of your personal income tax allowance, causing more of your salary to be taxed at higher rate.

So when asking on here for help, if you tell us you have simple affairs and your earnings are just PAYE plus a bit of bank account interest, you'll probably get an answer starting with the caveat 'as a basic rate taxpayer...' and we can rule out the more complicated stuff.

However, if you're not a basic rate taxpayer, there can be more complicated things to worry about - like if you earn between £100-125k you will be doing a tax return and will lose a pound of personal allowance for every couple of pounds of extra income you have, so there's no option to not tell HMRC about a fiver of dividends you earn, because there will be tax consequences.

To keep it simple, focus on your personal circumstances rather than focussing on all the other things that might be relevant if you're circumstances were different.