How is day trading taxed in the UK?
Day trading is tax-free1 in the UK for most residents who do so using a spread betting account. Most people won’t pay stamp duty or Capital Gains Tax (CGT), meaning you would keep 100% of your profits.
The other most popular way to day trade in the UK is using a CFD account. Most people won’t keep 100% of their profits when trading CFDs, because profits are subject to CGT.
The amount you pay is dependent on income. If you’re a basic rate taxpayer, you’ll be taxed at 10% and if you’re a higher rate taxpayer, you’ll pay 20%.
However, when trading CFDs, you may use them to offset losses against gains, meaning they could form a useful part of a hedging strategy.
It’s important to remember that tax laws are subject to change and differ depending on personal circumstances and the country you are trading from.
Please note that we don’t offer any tax advice to our clients. If this is a service that you’d like, we recommend consulting with a tax advisor to discuss your personal circumstances.
