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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have an account with a US options broker and I am

Resolved Question:

Hello,
I have an account with a US options broker and I am currently trading on their virtual trade, so no money has been deposited yet. In the future I want to start trading with them, using a technique called "covered call writing" , which pays me premium on any stock that I own.
I have filled out a w8ben form, which allows me to be taxed in the UK at a rate of 15% on capital gains, as I am a non us citizen.
I would just like clarify a few things regarding any tax that I would have to pay.
I have been told that I would have to pay tax on any money that has been withdrawn from my US broker account and deposited into my UK bank account. I am currently a self employed construction worker, and my accountant will submit my self assessment for me.
I would appreciate your help with this,
thanks
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.

For whom did you complete his form regarding tax at 15%? You should repudiate it immediately for as far as the UK is concerned it is simply balderdash and piffle. Under the UK Capital Gains Tax (CGT) regime in any one tax year the first 11.1K of gains are tax free and anything over, except residential property gains, is taxed at 10% or 20% or a combination of the two rates depending on your income including the gain in the relevant tax year. You declare your capital gains on your self assessment tax return which as a self employed person you will have to complete after 5 April annually.

You are not liable for any UK taxation on moneys withdrawn from your US brokerage account to your UK bank account. If you earn interest on your UK account that is liable to Income Tax (IT), Here is the Gov UK advice on the subject:

'Personal Savings Allowance

If your total taxable income is £17,000 or less you won’t pay any tax on your savings income.

Otherwise your allowance depends on which Income Tax band you’re in.

Income Tax band Tax-free savings income

Basic rate£1,000

Higher rate£500

Additional rate£0

You’ll pay tax on any income above this at your usual rate of Income Tax.'

Deposit takers have not deducted automatically since 6 April 2016.

I do hope that I have cleared the air for you on this matter.

Customer: replied 1 year ago.
Hi, thanks for the reply. I think that i have got the percentage slightly wrong with regard to the w8ben form. So really i just need to keep a record of all my trading activity and note this on my self assessment tax return after the 5th of April.
Thanks for your help with this matter.
Expert:  bigduckontax replied 1 year ago.

You are correct, good recording of capital gains and losses must be maintained to enable you to complete yourself assessment return.

Delighted to have been of assistance.

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Expert:  bigduckontax replied 1 year ago.

Thank you for your support.