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Why can't i copy trade on etoro.
Post by Anders » Fri Jul 14, 2017 4:03 pm.
I'm considering giving eToro a go with real money, having tried using their virtual account for a bit. I normally trade either in a Stocks and Share ISA or crypto copy traders with spread bets. eToro trades are contracts for differences (CFDs), and so as I understand it, are liable for capital gains tax. The eToro feature tempting me is its "copy people" function. Essentially, eToro will copy the trades of other people, which I pick, and automatically opening and closing positions.
My question is; will each automatically placed individual trade need to be accounted for under capital gains, in the year they were closed, or can it be reported as one overall profit/loss when I close the overall copy trade (say in the next tax year)?
I ask because I've sold a property this year, and copy trade crypto reddit so used all my CGT allowance. In the addition, the thought of having to work out gains/losses on hundreds of trades puts me right off.
AnthonyR Posts: 321 Joined: Wed Feb 08, 2017 2:33 pm.
Re: eToro copy trading, capital gains tax reporting.
Post by AnthonyR » Fri Jul 14, 2017 5:53 pm.
Many years ago (in a previous firm/life) one of our clients started CFD trading.
He enclosed a 20 page document detailing all of his transactions. it took one of our trainees 3 days to complete the CGT pages of his tax return. I think the client made about £50 profit overall.
Does that answer your question?
Anthony Rogers LLB CTA TEP Fusion Partners LLP [email protected]
Anders Posts: 6 Joined: Wed Jan 28, 2015 9:42 pm.
Re: eToro copy trading, capital gains tax reporting.
Post by Anders » Mon Jul 17, 2017 9:56 am.
Many years ago (in a previous firm/life) one of our clients started CFD trading.
He enclosed a 20 page document detailing all of his transactions. it took one of our trainees 3 days to complete the CGT pages of his tax return. I think the client made about £50 profit overall.
Does that answer your question?
I think so. The answer being yes, each individual automatic trade would need to be accounted for, despite it only being 1 action that I carried out.
This is way too much work for me to be bothered with. A good example of how governments can kill innovation (and reduce their tax take). Imagine if individuals had to do this when investing in funds.
Thanks for the steer.
AnthonyR Posts: 321 Joined: Wed Feb 08, 2017 2:33 pm.
Re: eToro copy trading, capital gains tax reporting.
Post by AnthonyR » Mon Jul 17, 2017 7:04 pm.
You could always complete the return with a summary of the total movement in the account and as long as you report all tax there should be no loss of tax but if HMRC were to investigate they'd probably want a breakdown of each transaction. Although obviously you should report each transaction individually.
HMRC guidance on CFDs is here:
Anthony Rogers LLB CTA TEP Fusion Partners LLP [email protected]
Anders Posts: 6 Joined: Wed Jan 28, 2015 9:42 pm.
Re: eToro copy trading, capital gains tax reporting.
Post by Anders » Tue Jul 18, 2017 4:41 pm.
You could always complete the return with a summary of the total movement in the account and as long as you report all tax there should be no loss of tax but if HMRC were to investigate they'd probably want a breakdown of each transaction. Although obviously you should report each transaction individually.
HMRC guidance on CFDs is here:
Thanks, the link is useful. I suspect the rules aren't really this simple though. Real life isn't!
The example doesn't outline what happens around partial closure of a position, or buying and selling the same shares within certain timescales. I believe that adds a lot of complexity?
Anders Posts: 6 Joined: Wed Jan 28, 2015 9:42 pm.
Re: eToro copy trading, capital gains tax reporting.
Post by Anders » Thu Jul 20, 2017 12:15 pm.
For shares, there are rules like Section 104.image Have I wrongly assumed that there would be similar rules for best copy trade crypto CFDs? https://www.gov.uk/government/publicati . s-tax-2015.
freezer_d Posts: 1 Joined: Mon Jan 29, 2018 3:40 pm.
Re: eToro copy trading, capital gains tax reporting.
Post by freezer_d » Mon Jan 29, 2018 4:25 pm.
Many thanks for the answers above. Etoro actually rovides a useful report in the form of a PDFor spreadsheet. This report/spreadsheet details each individual (closed) transaction carried out by each copied trader or self invested trades and realised profits. So not too much work actually. However as the monies/trades are calculated in $USD I am unsure as to how to calculate the gains in GBP.
1) Take account of the USD/GBP exchange rate (based on USD opening and closing value) to calculate the GBP opening and closing GBP amounts to calculate the loss/gain for CGT purposes in GBP? This would be possible as the report shows the open / close rates in USD + also opening/ closing dates . so all doable once the exchange rate on those dates is established.
2) Work out the gain/loss in USD (based on opening and closing value) and then use the exchange rate at the time the profit is realised (transaction closed). In fact the report actual shows the figure as profit or loss for each transaction.
My guess is number 1 from the above but not 100% sure on that.image
Any advice would be very welcome.

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