It seems completely wrong to me that anyone who makes a capital gain on a trade has to pay 40% of that to the government. The capital gains allowance is a pittance.

What I don't understand is the fact that people who risk there hard earned money by investing to try and secure a better future are hammered by tax. I am missign something here?

Anyway, at present this does not apply to myself as I don't profit that much from my trading, although I do intend this to change over the coming years. Firstly, If I were to trade as my sole occupation how would I be taxed? Secondly is there anyway I can avoid paying capital gains tax?

Thanks

Bingo

You are not taxed at 40%. You are taxed at your highest marginal rate on other income. If your only income were capital gains you would be taxed at 22% on the first part of it. You are taxed on 1,000 of capital gains in the same way as you would be taxed on 1,000 of additional salary or 1,000 of bank interest. In fact the capital gains allowance is very generous since it is not given on salary or bank interest.

Also bear in mind that most people's problem is not paying the taxman but stopping themselves from making a loss.

In addition, the first 7K each year (soon to become 5K as Gordon Brown meddles again) should be traded via a self-select ISA which is fully exempt from CGT