How the hell do you keep records of CFD?

OK, my mind is frazzled trying to tally capital gains tax for the CFD account.
Tried my best to refer to the forum posts but I just can’t seem to make it all work.

I mainly used ISA this year but I did have a little dabble with the CFD account, making a tiny bit.
The style I tried out was quick timed day trading with small amounts to get my feet wet, so to speak.

I have gone through the statements sent by T212 and tallied up roughly 40ish transactions from April this year, coincided with the closing exchange rate of the day using XE.com.
I make out that I should have profited £1.77 for this particular day, yet it shows £1.73 on T212 statement. So I am going to presume that I have made an error along the way.

What I’ve tried doing:

  1. (Purchase price + any additional purchases prior to closing that position) to get average price.
  2. Multiply this price by the closing exchange rate on that day using XE.com
  3. Sum them all up to check my total return/gain/loss.

But seriously, who the hell is going to do this for potentially thousands of trades?!?!

Love to know what you all do for capital gains reporting, ie: what’s your methods?
I can perhaps understand a few trades, but anything past 20+ seems a minefield.

HELP :question:

-edit-
Perhaps my issue is i’m using the historical close price for the exchange rate of the day, not the exchange rate it was at (midday) say. I’m guessing there is no way to get that data though…

To extremely simplify, would the monthly statement suffice to show the gains made? Surely this does everything for us in one go? Am I missing a trick here?

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I also have done a few CFD trades. My account currency in GBP and I pay UK capital gains tax. All I did was report the “result” of each position opened and closed, and also deducted from that cost of overnight interest (if any). As “cost” I use the margin required to open the position. Since Trading 212 computes everything in terms of GBP there is no need to worry about exchange rates, I think. E.g.

HMRC advice is that “All debits and credits to the account, including commission and sums equivalent to interest and dividends, are brought within the computation of the net chargeable gain or allowable loss when the contract is closed out.”

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Perfect. Seems a heck of a lot easier this way, no faff trying to calc it.

I was tempted to ping you on here as I knew you had done all this before, but it is Sunday after all haha. Thank you kindly Richard :slight_smile:

Just adding to what you mentioned, indeed the “Result” page of T212 does show everything in a converted state back to GBP. Where I was having difficulty was turning a trade done in USD back to GBP trying to convert it myself. I guess I will just have to accept that what T212 has done is indeed correct, as there is nothing we can do and technically as long as the amounts tally to what we were due in profits, all is well. Just very difficult trying to work this out manually to “verify” all transactions were done at the right exchange rate etc.

End of the day, T212 pays us what is shown on the result page, so we can’t gain anymore than what’s shown there. Should be good enough I imagine. But worth making a spreadsheet like you have done. Thanks again pal.

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My spreadsheet is what I submit as a pdf attachment to my self-assessment tax return. I compute the closing balance as (opening balance, ie margin)+(“result” as given by T212)-(interest)

Here is a screenshot of the page in SA online tool where this is done. I do not use the capital gains worksheet within the tool as that would be too cumbersome to complete.

An important thing to realise about tax is that there is no uniquely correct way to report income. All you need to do is make sure you are paying the right tax and making a reasonable explanation of how you computed it. If HMRC wants more information in support of your declarations, or information in a different form, then they may ask, and then you have received a free lesson on how to do it next time. But you only pay penalties if you paid less tax than you should. A tax accountant once told me that he makes liberal use of the “any other information” boxes to explain what he does if he has any doubts.

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Your a star, thanks so much for the extra tid bit. :+1:

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Sorry, guys - can I jump in here?

I’m also looking ahead to doing my end of year short-term capital gains tax.

Both eToro and Revolut provide quite easy to view statements with pretty clear beginning and ending account values, profit & loss, dividend payments received etc. Where / How can I find this on Trading212? The emailed statement doesn’t seem to show any of this as far as I can see (I’m on the regular ‘invest’ account, btw, not CFD):

You can request a statement from T212 for the previous year. Then, they send a different (and possibly more suitable) statement for taxes. (I assumed you mean daily statements in your last sentence.)

Can you not just get a statement from T212 that says:

Put £1k in. Got £2k out. Profit £1k.

Does HMRC need to know exact time stamps, direction etc ?

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You can look at HMRC pages for instructions on how to complete a self assessment tax return. They want to know dates (not exact times), sums involved (cost and sales proceeds), instruments traded, quantities.

A broker like Trading 212 cannot reliably calculate profit for you when you sell shares because you might own shares in the company on more than one platform and so Trading 212 does not have the information with which to calculate the average basis cost and hence the gain (or loss). Even if you own shares only on one platform the correct calculation of gains can be complex when shares are bought and sold on the same day or within 30 days.

Notes are here

The screenshot below shows basic information required. However, you do not have to use this form. You can submit the same facts in the printout of a spreadsheet which you attach to your return.

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Yes that’s for shares. I see “Date of disposal” etc.

CFDs are not shares and you haven’t disposed of anything when you close a position. You’re closing a contract.

Which is why I was wondering if you could just aggregate everything for the year.

That’s exactly how I handle it, and if HMRC want details the statements are available.

An aggregating report sounds like something you could try. HMRC can ask if they want more details.

HMRC are very responsive to queries put in messages to their Facebook account. Why not ask now about this and let us know what answer you receive?

I have just now sent them a message with a query about this myself. I will report back here on what they say.

UPDATE: The reply from HMRC is below.

I looked for answers to this question on taxactionweb.co.uk, a site used by professional UK accountants. They seem to think that positions need to be reported one by one. Someone writes

"Many years ago one of our clients started CFD trading.

He enclosed a 20 page document detailing all of his transactions… it took one of our trainees 3 days to complete the CGT pages of his tax return… I think the client made about £50 profit overall."

But obviously the client made a loss once accountancy fees were factored in!! Someone else writes

"You could always complete the return with a summary of the total movement in the account and as long as you report all tax there should be no loss of tax but if HMRC were to investigate they’d probably want a breakdown of each transaction. Although obviously you should report each transaction individually.“

These comments are from 2017. Perhaps practice has moved on. Someone says

“This is way too much work for me to be bothered with. A good example of how governments can kill innovation (and reduce their tax take).”

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I have a reply from HMRC. After consulting their back office for specialist help, the person chatting with me writes

"Thanks for waiting Richard.

You will need to include the totals in the ‘Other property’ section of the capital gains page. You should attach the computation showing the individual transactions."

I had asked specifically if a summary would be sufficient rather than a computation for each transaction.

“Hello. I am curious to know how to correctly report Capital Gains on CFDs (contracts for difference). It is easy to end up with dozens of these in the year. Do I need to report details individually for each position opened and closed in an attachment to the Other Property, Assets and Gains section (as I do for stocks in another section of SA 108), or can I just give a summary of aggregated losses and aggregated gains in the year? I am a small investor, not trading as a business.”

So I guess I will continue to submit my full spreadsheet of CFD trades as an attachment.

UPDATE:

I have now shared with them the thought that this reporting can be very burdensome and included the quotes from taxactionweb.co.uk that I shared above and asked again if a summary would suffice (with details retained in case of query). The reply is

Thank you for the feedback.

I’m sorry but we do need an attachment showing a breakdown of the individual transactions.

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And on that note, ISA trading it is :rofl:

10/10 Richard, you really go above and beyond!

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I’m not from the UK but it’s probably the same process in Ireland. Is this breakdown available from T212 in a nice excel sheet or something?

They email statements but the reports online are really unhelpful.