Day trading in the UK by non residents

If you are non resident and ordinarily resident, any gains are outside the scope of UK capital gains tax. However if the Revenue were successful in arguing you are a trader, you would be subject to income tax if you were regarded as trading through a UK a branch or agency. The key point here is that a distinction is conventionally drawn between trading 'with' the UK and 'within' the UK. Merely trading with persons in the UK does not, in itself, amount to trading in the UK. The question as to whether a non resident is trading within the UK is notoriously difficult to answer, and there have been many cases on this issue. The approach of the Revenue is usually to question where the contracts for the goods/services are made? If under contract law, contracts are made in the UK, they will usually regard a trade as being carried on in the UK. Other tests that the courts have stated include where do the operations take place from which the profits arise. It would also be necessary to look at the terms of any double tax treaty. In the context of day traders, whilst there may well be a case of there being a trade in the UK it is unlikely there would be an income tax charge on the basis that day traders don't have a UK permanent establishment.