Securities are certificates of value that you can trade on a financial market.
Examples of securities:
- shares in a company
- but also things like CFDs (contracts for difference), futures, options, etc. (sometimes called “derivatives”).
HMRC considers securities to be assets, meaning that if you sell securities for a profit that’s bigger than the Capital Gains Tax allowance (£12,300 this year), you would need to pay Capital Gains Tax (CGT) on the profit above the allowance. How much CGT you pay depends on your annual income: it can be either 15% or 20%.
You do this by submitting a Self Assessment Tax return before January 31st of the following year.
The only exception is profit from selling securities held in an ISA account – gains from ISAs are always tax-free.
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