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What are the rules on any any earnings secured from Binary

Resolved Question:

What are the rules on any any earnings secured from Binary Options trading?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The position is not entirely clear cut, but here is a summary from Elite Traders: 'It's a capital gain, unless your trading is qualified as a 'business', in which case you'd pay income tax (you'd also be able to deduct trading related expenses from your income). How this qualification happens is a mystery, but possible requirements probably are:earning the vast majority of your income from trading. trading in such a way that requires time, skill and expertise, and isn't just raw speculation. So a market making firm would see their profits taxed as income'This matter was aired in a House of Lords debate and the general summary concluded that: 'So, why in fact are online betting/investments not taxed? The honest answer would be directed back to the United Kingdom’s government’s taxation policy which states that if there is a tax on profits or income, there should also be an equal tax refund on losses made on the same type of service/investment.' You will immediately appreciate that substantial losses can be made in minutes with this type of trading so moving it from betting to income generation, a business, might result in an even lower revenue take. Binary Options Trading and UK Taxes state: 'Spread betting is only considered tax free if it is not your main source of income. that is to say that you have a job and already pay tax and NI. Tax sees spread betting as a form of gambling but like a professional gambler if its your main source of income its taxable.' I am sorry if this reply appears to be as long as the proverbial piece of string, but I would be inclined to follow the Elite Traders line. I do hope that I have shed some light on the situation for you. '
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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