Tax Treatment of Costs related to an investment portfolio

[Hyper10]

I have a small CFD portfolio, CFDs being contracts for difference . Basically losses or profits are charged as CGT but the portfolio also has other cost's, typically interest charged for loaned stock and commissions. In previous years, the dividend income received broadly matched the interest/admin costs and if there was any surplus, it was taxed as income.
My question is, this year I am showing a loss on the interest/admin as dividends received were not as much as usual.
In basic terms, income from Dividend £5,000. Interest (£4,500), admin fee's (£2,000) and commissions (£3,000). Total out goings (£9,500) loss of (£4,500).

Can I claim this loss against income tax or is it a capital loss

Any views are appreciated, thanks

[Newc]

That's a surprisingly complicated question. It comes down to the structure of your agreement with your broker. Are they paying you a net return and wrapping all those interest and admin costs onto their books, or do you get billed for the costs separately ?

If the costs are all wrapped up then you can't claim for the income tax loss (I'm assuming here you're not share trading as a business) and just have to suck it up. The flip side of this is that all those costs are deducted from dividends in good years and so reduce your income tax liability.

If they are billed separately they're allowable CGT costs (and you shouldn't be claiming them against your dividend income). You would also have to assign the general portfolio costs proportionately to each chargeable gain, which if you are a frequent trader is going to be a major pain.

[Hyper10]

Thanks for responding, I've done the what wise man should do and handed it to my Accountant, your considered response is appreciated