I'm looking to trade US equities, thinking of getting an account in the US (thinkorswim)...i plan to actively trade stocks and options, what are the tax reporting requirements on this stuff? will it make my tax return a nightmare, or is their a way whereb you just declare how much you made over the year? or do you need to report every buy and sell in your tax return (i am not a fan of admin!!)

also how does changing FX values ($/£ in this case) affect things?

many thanks

My understanding:

You will need to report for investment income and capital gains tax purposes in the UK, assuming you are liable to these taxes (UK resident, etc), just as you would for UK stocks. Whether you need to report capital gains depends on the amount of the gain (i.e. over the annual allowance) OR the total sales proceeds in the tax year (over a set limit - regardless whether you made a gain or not).

You can claim a deduction against UK tax for US withholding tax and the commissions paid. I am not sure but I believe you have to use the exchange rates prevailing at the transaction dates. You are theoretically liable for any currency gains.

The HRMC website has booklets covering most of this.

You will need to keep records to help complete your UK tax return. Unfortunately, the tax summary you get from the US broker will be of no use given they start and end their tax years differently to the UK. However, no issue as firms like E*Trade US have far better on-line systems than the UK ones I've seen. You will be asked to complete a W8 IRS form by your broker (not difficult) so they have evidence you are not a US resident.

Spread betting removes all the above hastle (no reporting, currency moves, etc). However, it is a different game. I find trading the US markets (apart from the falling dollar) to be far better - more choice, lower comissions, far better on-line systems, etc.

thanks for reply. i already spreadbet, but want to get involved in options on US shares, which the spreadbetters don't really do.

just to clarify...my notional amount would be pretty high so I'm sure i'd qualify for this total sales proceeds you mention...i am UK citizen/resident etc.....so would I have to keep track of every single trade i do, the gains i make, the exact FX rate at the time of trade etc etc? sounds like a total nightmare if I'm doing a few trades every day........

I'm no expert but believe you (as an individual) would. Maybe someone else (e.g. doing what you are) could confirm. If so, best pick a broker that provides this info for you in a nice easy download. I trade warrants and have to do this. Very painfull but then I should be tracking this as I go so I can evaluate and improve my trading performance. You could always call HRMC. They can be very helpful.