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I made a significant profit on an investment property and used

Customer Question

I made a significant profit on an investment property and used the profit to sell put options on the Swiss Franc in the FX markets. I have now significant losses on the FX which have been crystallised such that I am making a loss.
Can I offset the profit on the investment property against the losses in my option positions?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
, I'm Keith and happy to help you with your question.
One is to you a capital gain [investment property] the other a capital loss [FX trading]. Thus, in theory the losses may be used to offset the gains. Unfortunately the FX trading comes under a different taxation regime to the property transaction where the gain is subject to Capital Gains Tax. Any gain will be abated by your Annual Exempt Allowance of 11K and possibly, if the property was let, by Lettings Relief up to 40K. The rate of tax would be 18% or 28% or a combination of the two rates depending on your income including the gain in the year of sale. Unfortunately property transactions of this nature do not attract Entrepreneurs' Relief which would limit the rate of tax to 10%.
As regards ***** ***** trading this would be tax free as it would be regarded as betting, but as you have made a loss, it's a dead loss. Worldwife.Tax.com gives the following guidance [edited].
'Trading tax laws in the U.K. are much more trader-friendly than the United States.
This means a trader can trade the FX market and be free from paying taxes; thus, forex trading is tax-free!
The drawback to spread betting is that a trader cannot claim trading losses against his other personal income, as I have explained.
However, if a trader stays with spread betting, no taxes need to be paid on profits.
There are different pieces of legislation in process that could change FX tax laws very soon. I would advise you to consult a local, trusted professional over the impending changes. You should ensure that you is abiding by all proper laws.'
In conclusion, regrettably, the general answer to your question is in the negative. The two streams are incompatible. I am so sorry to have to rain on your parade.
bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 2 years ago.
Thank you support.

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