There is no concrete answer given by HMRC, they simply say each individuals circumstances is examined on a case by case basis.

The list of questions from your accountant reflects this situation. HMRC use 'common sense' (!) to designate trader from speculator.


As I understand it:

For the everyday working person if speculating (ie gambling) on asset/stock moves in your part time you pay no income tax OR CGT on any profits. This would likely be the case so long as you make more money from your working than trading. However if speculating actually is your sole income they will likely decide you are a day-trader and so liable to IT on your trade profits.

Here are some more scenarios: so if you work and speculate twice a week and hold your positions for a few hours at a time they may say you pay no IT on that speculation nor CGT. But if you DON'T work but speculate twice a week holding positions for only a few hours they may decide you are a day-trader liable for IT. Similarly if you work and speculate twice a week but hold positions for weeks at a time they may decide you are investing and need to pay CGT on profits. If you work and trade 20 times per week holding positions for a few hours and make 50% of what you take home from work they may say you pay no IT or CGT on that profit. But if you make 200% of your job income you may be asked to pay IT as they would see you more as a day trader (based on your sucess rate).

Only HMRC can give you your particular answer once you have outlined your position to them and they have looked at the situation based around these general rules.


NB - I am not a tax advisor and have deduced this from HMRC website and may be wrong so seek professional advice for further clarification.