Stock market and benefits and tax free allowance

Lostsoul13

If I have 6000 worth of shares cfds- which are exempt from capital gain tax - keeping in line with Esa’s 6000 assets (to keep my benefits) can I trade the cfds up to the tax free allowance?  Without losing my benefits??

I plan to earn about 33£ a day and transfer the money over to my bank account? And spend it- not save it. 

Would this be allowed??

or am I missing something here?? 

Regards 

calcotti

Any gains from trading shares are added as capital. There is no exemption for benefits over the £6,000 threshold. The CGT rules are not relevant.

When you spent the £33 you are spending capital - but as not as than is reasonable expenditure it isn’t a problem.

(I am no idea what a cfds is!)

Lostsoul13

So if I have 6000 on shares and make money I can still keep benefits? And the disposable income? With tax free allowances? I don’t understand? It is okay to spend that money up to my tax free allowance?? The 33 a day?? 

A cfd is ;

A contract for differences (CFD) is a financial contract that pays the differences in the settlement price between the open and closing trades. CFDs essentially allow investors to trade the direction of securities over the very short-term.

calcotti

As already advised the tax rules have nothing to do with ESA.

For ESA if you have more than £6,000 the ESA is reduced by £1 per week for every £250, for part of thereof, above £6,000. If your capital goes over £16,000 then your income based ESA would not.

The return on your shares is capital. If you have capital of £6,000 at the start of the week and make £33/day you would have capital of £6,231 at the end of a week. That would reduce your ESA by £1 per week.

If you spend capital it will be treat as deprivation of capital if it is thought primarily to maintain your benefit. If you are spending it on essential expenditure it will what we a problem.

Lostsoul13

Would away around it be too invest 3000 and spend the 33 a day ? Could I do this up to my tax free allowance? Keeping inline with capital etc? 

poppy123456

As advised previously, it's got nothing to do with tax allowance. It doesn't matter where you're savings are, whether you invest them or withdraw them, they still count.

66Mustang

£33 a day on £6000 is a hell of a lot if you think you can make that reliably every day. I would be selling my knowledge for vast sums not worrying about benefits or £3000 being here or there. Not trying to be sarcastic. You are more likely to lose most of your money investing in CFDs.

If you really want to invest one thing you could do is put the money in a SIPP. I don't know if you can trade CFDs within a SIPP or not, though. You can trade normal shares in a SIPP and you don't pay tax (until you withdraw the money as a pension). You can't access that until age 55/57+ so I believe it is not classed as capital. But I am not sure if putting lump sums in there would be classed as deprivation of capital. Maybe you could justifiably deposit a little every month into a SIPP? Not sure!

Lostsoul13

What about going self employed with permitted work and earning 167 a week through stock and shares ?