Would just like a little bit of advise regarding tax. I am based in UK and I began trading on 212 5-6 weeks ago. I have been using the invest side of 212 and my strategy has been two fold. I have been investing for the long term but I have also been buying stocks and then selling them sometimes making couple of pound then re-buying a stock etc. I have done some research on the matter and it’s not very clear if I am liable to pay income tax or whether it goes under capital gains. I have not withdrawn any money from the app and I don’t intend to as I am building up my funds month on month. Also do I need to keep a record of everything I have bought and sold times dates etc or just keep account of the profits I have made.
Thank you I’m advance for reply’s
It is simple to complete your tax return if you can answer No to both of the following questions. If so then you will not have to report anything - though you will have to keep records of your gains in case you are asked.
Did you dispose of chargeable assets worth more than £48,000? Are your total chargeable gains before deducting losses more than £12,300?
If you cannot answer No to both of these then there is much to keep track of (though dates is enough, not times). Unless HMRC allow you to qualify under special rules as a day trader, all your gains and losses are taxed under the capital gains regime. I recommend reading all the pages that start here: https://www.gov.uk/tax-sell-shares
You need to understand the special rules that are set out in point 2. “How to identify the shares disposed of”. When you sell shares you have to figure out the gain against their cost - but that cost may be the cost of shares you bought the same day, in the next 30 days, or on past days. It is important to keep track of the average GBP per share cost price in your so-called Section 104 holding, which is all shares bought in past days.
There is no getting away from the fact that very careful record-keeping is required. I use a Google spreadsheet to keep track, using the information in the History section and of the Trading 212 app (and Results section for CFD). If you invest in USD stocks then you have to keep track of the exchange rates at which GBP <-> USD transactions occur, since all CGT is figured on GBP costs and proceeds.
In the Capital Gains section of a self-assessment tax return there is a subsection called “List share and securities” - this is for your gains/losses from share investment. There is another section called “Other property, assets and gains” - put results from CFD trading here. When they ask for “cost” of a CFD position you can put the margin that was required. For proceeds, put “cost” + “result” from the Trading 212 Results history. You can also deduct the cost of any interest from your gain.
If you keep a neat spreadsheet you can print it as a pdf and attach it to your online self assessment tax return. In the return itself you only need to put the number of transactions, the total proceeds, total gains before losses and total losses.
It would be interesting to know how others keep their records. My method is to have a spreadsheet like this. It shows that I presently have 12 shares of V. The first two purchases were for 2 and 0.5 shares. My current cost per share is £154.60. I have omitted the lines for purchases of the remaining 10.5 shares.
The function GOOGLEFINANCE(“V”) gives me the current share price. The current exchange rate comes from GOOGLEFINANCE(“USDGBP”). I have contiguous lines in a “Diary” sheet for each of the companies or ETFs in which I own shares, and I add new lines as required.