Everyone seems to get a different answer to this question, even from the IR. I am a member of a trading room and the organiser assures me that in the Uk gains made on Forex are classed as Capital gains tax. I have checked this out and got it verified today by the Inland Revenue. I spoke to a guy on the phone who was pretty clued in to it. He puts it like this. If you do this full time for a living you are not an employee, neither are you self-employed. You are in effect a speculator(not a gambler). You are speculating on changes of currency rates. You have no employees, customers etc. This therefore makes you liable for capital gains tax. There is an exemption on £10100 before tax is due. So if you put £10000 into a broker you would be allowed to withdraw your initial investment plus the exemption amount before tax would be due. In this case then you would only have to pay tax on profit over £20100. The rate of tax would be 18%. This is a fixed figure for any amount from £1 - £1000000. You would fill in a tax return form at the end of the tax year detailing amount invested originally, total profit,total loss and final balance. You would not need to provide every single winning/losing trade information. You would also be liable to upkeep your National Insurance, assuming you were not working full time. I believe that would be at self employed rates but not too sure on that