Module 1F: Futures Foundations · Lesson 13 of 13 · Back to Futures Foundations · Course
What you’ll learn
- how futures gains are usually taxed for individuals
- when trading could be treated as income
- why futures don’t get the spread-bet exemption
- converting dollar gains to pounds
- how prop payouts differ
Not tax advice. This is general information about how UK tax usually works, based on HMRC guidance. Your situation may be different and the rules change. Speak to a qualified accountant or HMRC if you’re unsure.
Futures and Capital Gains Tax
For most individuals, gains and losses on futures are treated as capital gains and losses and fall under Capital Gains Tax (CGT), unless HMRC considers you to be trading as a business (see below). HMRC’s guidance on futures and contracts for differences is in its Capital Gains Manual (CG56100).
For 2026/27, our UK tax guide sets out the CGT allowance (£3,000) and rates (18% within your basic rate band, 24% above), with GOV.UK sources.
Losses
Capital losses on futures can usually be set against capital gains in the same tax year, and unused losses can be carried forward – but only if you report them to HMRC, normally within four years of the end of the tax year. Keep records of every trade.
Could it be income instead?
If HMRC decides your activity amounts to a trade – for example, frequent, organised, commercial trading as your main living – profits could be taxed as income rather than gains. In practice HMRC rarely treats private individuals’ speculative trading this way, but it depends on the facts. This is exactly the kind of question for an accountant.
No spread-bet exemption
Spread betting profits are usually free of CGT and Income Tax for individuals. Futures don’t get that treatment. The same market move can be tax-free as a spread bet and taxable as a futures trade. (Losses on spread bets can’t be used against other gains, though.) See futures vs spread betting vs CFDs.
Dollars and pounds
US futures gains and losses are in dollars. For UK tax, amounts are converted into pounds. Keep a record of the exchange rates you use and be consistent. Currency movements on dollar balances can have their own tax consequences – ask an accountant if you hold large dollar balances.
Prop firm payouts are different
A payout from a prop firm’s simulated account isn’t a gain on a futures contract you owned. It’s a payment from the firm under a contract with you. It’s usually treated as income, not a capital gain. Our UK tax guide covers prop payouts.
Reporting
If you have gains or income to report, you’ll usually need to file a Self Assessment tax return. Keep statements, trade records, fees and exchange rates for every tax year.
Key takeaways
- Futures gains are usually subject to Capital Gains Tax for individuals.
- Losses can usually offset gains if reported to HMRC.
- Futures don’t get the spread-bet exemption.
- Convert dollar figures into pounds and keep records.
- Prop firm payouts are usually income, not capital gains. Not tax advice – check with an accountant.
Quick check
- Are futures gains usually income or capital gains for a private individual?
- Do futures get the spread-bet tax exemption?
- How are prop firm payouts usually treated?
Answers: 1) Capital gains (unless HMRC treats it as a trade). 2) No. 3) As income.
FAQs
Can I hold futures in an ISA?
No. Futures can’t be held in a stocks and shares ISA.
Is this the same for a limited company?
No. Companies are taxed differently. Speak to an accountant.
Disclaimer: This page is general education, not financial, investment or tax advice or a personal recommendation, and it doesn’t take your circumstances into account. Examples are hypothetical, for illustration only, and not an invitation to buy or sell. Learning to trade doesn’t guarantee profits. Past performance is not a reliable guide to future results. Futures, spread bets and CFDs are complex and carry a high risk of losing money quickly because of leverage, and most retail traders lose money. With a real futures account, losses can exceed your deposit. Only trade with money you can afford to lose, and speak to an independent FCA-authorised adviser if you’re unsure. Information checked 18 October 2026. Read our full risk warning.