Is Forex Trading Legal in UK? Let’s Find Out - Eaglesinvestors

Is forex trading legal in UK?- I remember when I started exploring forex in 2007, at a tender age of 17. i was supposed to wait 6 months in order to open a real money account. However that did not stop me, i made several enquiries and continued training with my demo account. Urged by the inability to contain my excitement, I decided to use my mother’s name to open my first real account! Before investing an amount, I was curious about the thought that came into my mind, Is Forex trading legal in UK? Well, I found the answer soon.

I started my venture with £500 that I saved with a part-time job. I felt so dominant, I was a “trader,” I was making money from home! This lasted a couple of months, and I blew up my account. I was overwhelmed.

I will never disregard how I felt at that time! Apparently, this event of my life made me concentrate so much on studying the Forex market and try to become the best trader of all time.

I went through University studying statistics for the financial markets. Besides, I attended so many courses and I have studied more than 100 books. I have been a moderator for one of the most famous forums about Forex. And I have never quit learning, and I will never stop.

Is Forex trading legal in UK seems a fine question for the people of the UK? Just like other countries, the UK allows Forex traders and brokers to earn money.

Why The Question Of Legality In The First Place?

The forex market is the most significant market in the world without a doubt it is an industry that provides opportunities for traders all over the world to make money and even start their own successful business through forex trading. Therefore, Like many other activities involving money especially digitally, forex trading is surrounded by a number of myths and false impressions. Several people around the world are reluctant to get involved in forex trading because they believe that it is gambling and is prohibited in their country; however, in my opinion forex trading is not gambling and yes it is not available in other countries but in most it is allowed .

Individuals can legally trade forex in all countries where legal entities as well as individuals are permitted to own have currency accounts currency purchases at bank exchange offices and so on Moreover forex traders also use forex for international investments, export and import operations and several other important activities.

Is Forex Trading Legal in UK?

For a Forex broker or Forex trader, the UK is an ideal place on the British desert island. It has always been known to acquire some of the most wanted traits when it comes to trading. It provides traders with trading products and services that are always the most up-to-date, relevant, and admirer of both abroad and home. In fact, the financial market in the UK shows off new regulatory guidelines for those who are well familiar with Forex trading. These guidelines are, most of the time, tailor-made for the professional Forex traders.

While choosing any broker, the UK laws are much more flexible. No strict trade restrictions are provided, and no violation of laws or money laundering exists. However, Forex trading is entirely legal in the UK as these regulatory and legal conditions are the reasons that UK Forex brokers have been at the head of the queue. When it comes to customer services, helping traders make a profit at the day end, and dedication to keep transactions secure.

Taxation Of Forex Profits in The UK

With the hype of forex trading new traders don’t bother looking for information about taxes related to forex trading. However along with learning how to trade profitably, traders also need to learn to account for their forex trading activities whether they are gains or losses. If you do Your tax accounting on a regular basis, it’ll be easy for you to stay within the parameters of the law.

Tax on forex trading profits is analyzed in 3 main categories in the uk

Private Investor

In this case your profits or losses will be taxed according to the capital gains taxing regime.

Self-employed trader

As a self-employed trader you will be taxed just like any other self-employed individual in the UK who is liable to pay business tax.

Speculative

In the UK, forex,spread betting and CFDs fall i n the speculative categoriy because there is no underlying asset that is actually owned. Therefore, these derivatives dodge Capital Gains Tax; and the profits from these are seen by the HMRC as tax free.

The tax laws on forex trading in the UK are a lot more flexible than in most countries. At present there are no taxes on spread betting profits; Moreover several forex brokers offer regular accounts as well as forex demo accounts with the spread betting structure. Therefore with this spread betting structure you can successfully trade the forex market and not have to pay taxes .

The Financial Conduct Authority

When I participated in the Forex trading market it was important for me to have the question ‘is forex trading Legal in Uk?’ answered. Nevertheless, anyone who is interested in forex trading needs to be aware of the customs and laws that control the right trading procedures. There are three leading institutions and agencies in the UK that make sure traders will be provided with fair conditions, and their funds will not be subject to scams.

In the UK, the most vital regulatory body in charge of regulating Forex brokers is the FCA, Financial Conduct Authority. This agency is independent of other organizational entities. It also assigned to managing the legality of all UK companies as well as individual investors who contribute to Forex trading.

The FCA works in the interest of its consumers.It has the ability to control a trader’s loss based on their peronal capacity by placing a leverage limit on forex trading. Every Broker that is regulated by FCA is compliant with stringent UK regulations. In the event of any consumer abuse, or the occurance of fraud, the Financial Conduct Authority has to conduct an inquiry, then investigate accordingly.

 

Here is a list of the Forex brokers who are regulated with FCA.

FCA.

This list is just a brief overview of the Forex brokers who are regulated by FCA. If we randomly pick up UFX or Pepperstone, we cannot say that one broker is better than other.

You have the full choice to select whichever broker you prefer. For guidance in your comparison you can read UFX review as well as Pepperstone review.

 

Final Thoughts

I am Confident that after reading this artic you will be able to choose the right broker independently. However, Forex trading is not an easy venture, and it requires; time, effort , patience and consistency just to name a few. The Forex trading market is  unpredictable because even experts can lose money; and even beginners can make profits. Therefore, whether you are an expert or a rookie educating yourself on the basics of forex trading; as well as the laws and regulations of the industry in your country as well as worldwide, is very important. Is forex trading legal in UK? YES IT IS. Happy Trading!

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2 Comments

  1. Hi Tayyab
    How can you trust a trader from UK when you’re in Canada? Is there a way for them proving they are legit and clean?

    • Patricia Admin says:

      Hello Stef,

      The way regulations work is the following. If you are opening the account under that regulation but you are not a resident, you are not directly protected by the regulation, BUT, you might be entitled to their compensation scheme, in the case the broker has financial problems.

      The best way to check if the broker is clean is by doing your own due diligence, checking if/how many penalties they have received from their different regulations. If they have or not, withdrawal problems and if their customer support is acceptable.

      At the end of the day, the customer support is one of the most important factors that will influence your trading experience.

      I hope our response helped you. Let us know if you would like a further conversation! You can chat with us in our support chat :).
      Have a great day Stef.
      Regards, your team in EaglesInvestors.

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