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Ash
Ash, Solicitor
Category: Law
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Experience:  Solicitor with 5+ years experience
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This question may suit a highly qualified UK accountant and

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This question may suit a highly qualified UK accountant and is about avoiding tax by setting up in a new business. I have been long term unemployed in the UK and have been learning to trade on the foreign exchange binary options market. I now have £30k
coming to me due to a deceased relative. I want to use this money to trade with but I am registered unemployed and this amount would go against my benefits applications. Would it be best to set up a Limited company and start some other business (or non-profit
organisation) so that I could trade in my spare time and keep my forex trading profits for myself in my personal account? Meanwhile I could tick over in my employment status as employed by the business and so avoid paying tax on my high trading profits and
very little tax on running a business that just ticks over?
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you.
This is classed as betting and therefore no tax is payable. However if you have capital in excess of £16,000 this may effect benefits. However by putting this into a company etc you are still deemed to have this capital and to be disposing of it on purpose.
Therefore sadly by getting the £30k you are likely to lose benefits. As for tax on income, if Forex is your main income then it can be taxed.If its secondary then it won't be taken.
Can I clarify anything for you about this today please?
Alex
Customer: replied 1 year ago.
What scenario could I set up whereby Forex would be seen as a secondary income? For example, could I get a friend to employ me within their company and just work only a few hours (in practice), then make huge amounts of income from betting on Forex for an hour a day (that would not be needed to be declared for tax purposes). Or a second example, could I emigrate to maybe Switzerland and just travel back and forth to the UK often to see my family and stay in a hotel if necessary - and not put in an income statement in to the tax office.
Customer: replied 1 year ago.
Thank you Alex
Expert:  Ash replied 1 year ago.
But if your friend employs its for your purpose, so you would be the beneficiary. You could move away out the country and then come back for short periods.
Or you could just live and pay your tax in the UK and not worry about hiding. If you make as much money as you think then it will only be on the profit you would pay tax.
Does that help?
Alex
Customer: replied 1 year ago.
Could my friend employ me as an investment consultant where I could trade his forex account for him and so he is the beneficiary of my work? Then I could trade my own Forex account as a secondary income (although it would be a much greater profit)?Just live and pay my tax in the UK and not worry about hiding is unfavorable, as the tax I have heard will be around 50% of my income. I might just as well start my own charitable organisation and bet in my spare time - would my forex income then be seen as a secondary income or would it be seen as the main income just because it is the larger income?Will the Forex income always be considered as the main income if it is the larger amount to any other income I produce?
Customer: replied 1 year ago.
Thanks again Alex
Expert:  Ash replied 1 year ago.
Yes if Forex is more than other income its primary and taxable. Tax is only if you earn more than £150,000 year. Even then its only sums above £150k is taxed at 50%.
Alex
Customer: replied 1 year ago.
If I receive the money and then put it in a trading account is that money considered as income as it is. or, is it only considered income when I make withdrawals of profits from it back into my usual personal bank debit account?As it is my sole income if I get £149k profits from it back into my bank account in my first year will I pay any tax?
Customer: replied 1 year ago.
Thanks again Alex
Expert:  Ash replied 1 year ago.
Yes it is income as soon as you make it on the trade, its not when you withdraw it.
You pay tax yes. The standard Personal Allowance is £10,600, which is the amount of income you don’t have to pay tax on.
Basic rate 20% £0 to £31,785 People with the standard Personal Allowance start paying this rate on income over £10,600
Higher rate 40% £31,786 to £150,000 People with the standard Personal Allowance start paying this rate on income over £42,385
Additional rate 45% is £150,001 and over.
Does that clarify?
Alex
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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