Tax Planning For Forex Traders

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One of the problems faced by forex traders and investors is obtaining detailed tax planning advice.

In this new book, trading tax specialist Lee Hadnum FCA CTA, looks at how forex traders are taxed and the strategies they can employ to reduce their taxes.

Subjects covered in this book include:

Trading or Investing in Forex
Deciding whether you are a trading or investing in Forex will have a huge impact on your tax position. This is covered in detail with the aid of numerous examples to illustrate key points.

National Insurance For Forex Traders
Top Tax Deductions
There are a number of tax deductions that traders and investors can deduct. Note that the rules for forex traders are very different to the rules for forex investors. We look at the principles that apply and illustrate the top deductions you can claim to reduce tax

Maximising Home Deductions

If you trade forex from home there are lots of tax deductions available.

CGT Matching Rules For Forex Investors
If you’re a forex investor the matching rules determine how you determine the cost of your forex disposals for calculating your capital gain. Having a good understanding of these rules allows you to maximise timing benefits.

Making The Most Of Capital Losses

If you incur losses you will want to ensure they are offset as tax efficiently as possible.

Deferring CGT On Forex Gains
Deferring CGT significantly increases your trading balance. We look at the main occasions you can defer CGT on Forex gains.

Income Splitting To Reduce Tax

Income splitting allows you to share the forex income/gains with another person to maximise the offset of personal allowances and basic rate tax bands.

Common Forex Q&A’s

Avoiding The 45% Rate of Income Tax

The 45% rate of income tax applies to income (including Forex profits) over £150,000. We look at the main ways you can avoid this tax rate.

Using a UK Company For Forex Investing/Trading

If you trade personally you could be taxed at rates up to 45%, and investors can pay tax at upto 28%. A UK company could pay just 20%. We look how how UK companies can be used by forex traders and investors to reduce tax.

Using An Existing Company

If you own an existing company you may consider using any surplus funds in the company to carry out a forex activity. However, there are a number of UK tax implications. We look at this in detail.

Non Residence And Forex Tax

Non UK residents have a number of UK tax advantages if they are trading or investing in forex. We look when this status can be used to avoid UK tax.

Tax Planning If You Plan To Become Non- Resident In The Future

If you are UK resident now but anticipating becoming non-resident in the future there are a number of steps you can use now to reduce tax.

Establishing Treaty Residence Overseas
When You Can Benefit From Offshore Forex

Using offshore forex trading can still be used to reduce tax – we show you when

Using An Offshore Broker For Forex Trading Or Investing

Making The Most Of Non Residence
Using An Offshore Company For Forex Trading Or Investing
Using An Offshore Foundation For Forex Trading Or Investing
About The Author

The Author of “Tax Planning For Forex Traders” is Lee Hadnum FCA CTA. Lee is a rarity among tax advisers having both legal and chartered accountant qualifications. After qualifying a prize winner in the Institute of Chartered Accountants exams, he also went on to become a chartered tax adviser (CTA).

Lee is the former tax columnist at “YourTradingEdge” – a popular financial trading publication.

Product Details

  • Paperback: 98 pages
  • Publisher: CreateSpace Independent Publishing Platform (January 10, 2014)
  • Language: English
  • ISBN-10: 1494971224
  • ISBN-13: 978-1494971229
  • Product Dimensions: 6 x 0.2 x 9 inches
  • Shipping Weight: 7 ounces

77. The 20 Components of a Successful Trading Plan

Practice trading with a free demo account:

View this entire lesson:

In our last lesson we finished up our discussion on trading journals with a look at the important things to look for when reviewing past trades. In today's lesson we are going to discuss how to handle trading like a business with a discussion of how to compile a trading business plan.

One of the leading causes for the failure of many businesses is their lack of planning. I think most successful people would agree that if you want to be successful in life and business you need to have a plan for how to obtain that success, set goals to meet along the way, and then work on executing your plan and meeting your goals.

Trading is no different from any other business in this sense and it is my opinion that those who fail to plan out their trading like a business are doomed to failure as well. With this in mind it is important to have a written business plan for your trading just as you would for any other business. Below are some of the things which should be included in that plan, most if not all of which you should now have a good understanding of if you have watched all of our lessons up to this point.

What are your reasons for wanting to become a trader?
What do you hope to gain from trading? Be specific here. If the possibility of making a lot of money has drawn you towards trading then list out how much money you want to make from trading and what you plan to do with that money if you make it.
What are the things that are going to separate you from the large majority of traders who fail?
What are your biggest weaknesses?
How do you plan to address your weaknesses and leverage your strengths?
How much time can you devote towards actively following the market?
Do you plan to day trade, swing trade, position trade or a combination of the three? Does your choice here reflect the time you have to devote to the markets?
What market or markets do you plan to trade and why?
At what times throughout the day are you going to spend actually trading, researching trades, and then learning about the market?
What are your criteria for entering a trade?
What are your criteria for exiting a trade?
What is your money management strategy?
How will you know if one of the pieces of your strategy stops working?
After identifying that one of the pieces of your strategy has stopped working what will you do to address it?
What trading software and equipment you will use to trade and how much is it?
What Broker/Brokers will you use?
Do you plan to add money to your account and if so where is that money going to come from?
If you are profitable do you plan to reinvest profits or withdraw some or all of them?
If you plan to trade full time how you will support yourself if you aren't profitable right away.
How much money do you plan to start to trade with? Does the math work out when considering taxes, all costs, living expenses and your initial trading balance?

As you can see, just as with any business, there are many things to consider before jumping into trading. From my experience however those who actually take the time to think about and write down the answers to each of the above questions have a much higher chance of success than those who do not.

That's our lesson for today and this completes the basics of trading course. I hope you have had as much fun and learned as much from our first trading basics course as I have from putting it together.
Steve Collie

About Steve Collie

Steve Collie is a retired New Zealand based local businessman and entrepreneur. He is the founder and general manager of Stephen Collie Enterprises.

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