EA and UK Tax

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Slash
52
Slash  

I was wondering if anybody could advise on the UK tax law and running EA. 

I'm self-employed freelancer programmer (web / mobile) , but I want to have an external / passive income source, in form of a EA. (which I purchased from the market)

I'm originaly from central europian country, but I reside in UK for 10+ years now.

I've chosen Pepperstone broker, and will run this EA in VPS. 

Other than that, I will do no manual trading... I am planning to run it in for 3-4 years and then take out the earnings...


Got a few questions:

1) Does running EA fall under "spread betting" in which case there's no tax?

2) Can it be "made" into spread betting, if so how ? (Choosing different broker?)

3) If it can't be, is this something that needs to be filed under Capital Gain Tax?

4) or optionally something I need to only mention on the tax self-assessment form?

5) Do I need to pay for this annually even though the broker is in Australia and I don't want to cash out till year 3 or 4?


Sorry, quite new to this, hopefully, somebody will have some answers!


Many thanks


Slash

Keith Watford
Moderator
14020
Keith Watford  

1) Does running EA fall under "spread betting" in which case there's no tax?

only if it is a spread betting account

2) Can it be "made" into spread betting, if so how ? (Choosing different broker?)

no, change broker

3) If it can't be, is this something that needs to be filed under Capital Gain Tax?

I believe that it should fall under capital gains but best to check with the HMRC.

4 and 5 not sure, check with HMRC.

Slash
52
Slash  

@Keith Watford Thank you, for the answers for 1 & 2..

Would you happen to know, what are the downsides of using spread betting brokers (e.g. City Index, IF, ANDA, ETX, FX Pro)  as opposed to brokers like Pepperstone?  

Keith Watford
Moderator
14020
Keith Watford  
Slash:

@Keith Watford Thank you, for the answers for 1 & 2..

Would you happen to know, what are the downsides of using spread betting brokers (e.g. City Index, IF, ANDA, ETX, FX Pro)  as opposed to brokers like Pepperstone?  

We are not allowed to discuss about Brokers too much in this forum.

Personally I have not experienced any downside with the spread betting brokers that I have used.

Slash
52
Slash  

@Keith Watford Thanks for your answer, sorry, didn't know this wasn't allowed, probably need to read the rules!

Although I imagine breaking the rules, would be recommending / advertising a particular/specific Broker, and not talking about them in generic terms right?

Keith Watford
Moderator
14020
Keith Watford  
Slash:

@Keith Watford Thanks for your answer, sorry, didn't know this wasn't allowed, probably need to read the rules!

Although I imagine breaking the rules, would be recommending / advertising a particular/specific Broker, and not talking about them in generic terms right?

Absolutely correct as long as you say nothing that could be considered promotion or negative about a particular broker.

Doesn't really give much leeway.

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