FuturesBetting? Holy Moly !!

This is a discussion on FuturesBetting? Holy Moly !! within the Futures & Options forums, part of the Markets category; UK spreadbetting is treated as not subject to tax on net winnings. Why should SB services from Gibraltar for the ...

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Old Sep 14, 2005, 10:28pm   #16
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UK spreadbetting is treated as not subject to tax on net winnings. Why should SB services from Gibraltar for the UK resident be taxed if he makes a net profit? I think all thoughts need to be concentrated here so any further comment must be helpful.

Am I right to say that correctly spreadbetting is 'tax paid' so that no tax arises in the hands of the spreadbetter who happens to be making money?
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Old Sep 14, 2005, 10:29pm   #17
 
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I agree Z, as far as spread betting goes this is as tight as you can go -BUT.......

But the only reason for The Professional Trader to Spread Bet instead of trading futures direct is....... Tax. Otherwise you are always going to be better off directly trading the Futures

I also agree with your last point that we are getting off the point. I will start a seperate thread on Tax and SB.

Thanks for your reply
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Old Sep 14, 2005, 10:37pm   #18
 
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Hi S,
thats not correct. You are liable to declare your worldwide earnings if Uk resident.

You are then subject to Uk taxatiion - if that is exempt then so be it - but you will not get that (think about it from the inland revenue point of view)

Now, many people dont declare their overseas earnings, assuming they dont need to, or that it may be exempt some how (this is not restricted to trading or betting, could be property trransactions etc etc) - again that tax man aint silly - if you decide not to declare you run the risk, and it is a real risk, of being prosecuted for tax evasion.

You need to bear that in mind with anything you do offshore or otherwise.

Bundbaby
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Old Sep 14, 2005, 11:21pm   #19
 
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zigglewigler started this thread bundbaby
Thanks for taking the Tax issue elsewhere, it's one of those endless topics that never finds a definitive answer.

I am very happy to trade e-mini sp500s with IB.

However, if FutsBet offers a product that is as good as the futures contract, with the added benefits(leaving the tax issue aside), particularly, a better platform, better back office and support etc, with no worse cost per contract(2way say I can start on a higher tier so it might be cheaper still), then this is potentially the best of both worlds.

Nobody has yet demonstrated that the FutsBet product performs any less well that direct to market e-minis.

This is what's important, it is just as good as direct to market! This is why I can't understand the lack of moments of epiphany (or at least a " '**** me sideways!") around here!
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Old Sep 14, 2005, 11:30pm   #20
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Quote:
Originally Posted by bundbaby
Hi S,
thats not correct. You are liable to declare your worldwide earnings if Uk resident.

You are then subject to Uk taxatiion - if that is exempt then so be it - but you will not get that (think about it from the inland revenue point of view)

Now, many people dont declare their overseas earnings, assuming they dont need to, or that it may be exempt some how (this is not restricted to trading or betting, could be property trransactions etc etc) - again that tax man aint silly - if you decide not to declare you run the risk, and it is a real risk, of being prosecuted for tax evasion.

You need to bear that in mind with anything you do offshore or otherwise.

Bundbaby
FuturesBetting.com say in their e-mail, "And of course under current UK legislation, spreadbetting profits are Tax Free!"
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Old Sep 14, 2005, 11:44pm   #21
 
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Hi S,

as mentioned before - this kind of thing maybe true for the odd bet, or if you are losing money -but, this is not true if it becomes a substantial money making thing.

Once you are classed a professional trader, or worse still, you are already known as a professional trader, then the over-riding case is that you liable to pay tax on your professional earnings.

Dont be fooled by "spin" than SB firms are putting on this. If you are a professional and I assume you are or want to be, then this is not a loophole for you.

To be fair to zigglewiggler who posted the first part of the thread, i think we should leave tax on spread betting for a new string.

thanks for the quote.

BB
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Old Sep 15, 2005, 12:48am   #22
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Originally Posted by bundbaby
Hi S,

as mentioned before - this kind of thing maybe true for the odd bet, or if you are losing money -but, this is not true if it becomes a substantial money making thing.

Once you are classed a professional trader, or worse still, you are already known as a professional trader, then the over-riding case is that you liable to pay tax on your professional earnings.

Dont be fooled by "spin" than SB firms are putting on this. If you are a professional and I assume you are or want to be, then this is not a loophole for you.

To be fair to zigglewiggler who posted the first part of the thread, i think we should leave tax on spread betting for a new string.

thanks for the quote.

BB
What authority or expertise do you have in taxation?

UK SB companies, regulated by the SFA, would not be advertising unlawful claims as to the tax free status of spreadbetting.

If I had a personal view as to the future tax free status of SB trading, it would be that it is not a big enough target for Gordon Brown.
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Old Sep 15, 2005, 1:13am   #23
 
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Hi FS,

I have set a new thread Tax on Spread Betting. Please add to it i welcome your comments.

ps

My comments are based on my experiences and opinions. I hope people respect that as i respect your opinions. In this case I am not an accountant although having traded globally for 15 years or more it is based on numerous meetings with Tax Barristers, Pension Funds, Accountants, Trusts, Hedge Funds etc etc and how i have successfully and LEGALLY set up my own affairs in a black and white manner.

yours
BB
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Old Sep 15, 2005, 4:03pm   #24
 
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zigglewigler started this thread Just had a revealing conversation.

FuturesBetting is located in Gibraltar because as non proprietory traders (unlike Uk SBs) there is no ability for them to right off loss against tax, they're intermediaries and don't have the luxury.

UK SBs are playing the markets themselves against clients, so fit into another type of business model, FutBet would be penalised under mainland Tax codes.

There's probably a better informed explanation than mine, but that's the gist of it.

FutBet aren't in Gibraltar for 'dodgy' reasons.

The FSA are currently approving them as well. They are subject to UK law.
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Old Sep 15, 2005, 4:16pm   #25
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Quote:
Originally Posted by zigglewigler
Just had a revealing conversation.

FuturesBetting is located in Gibraltar because as non proprietory traders (unlike Uk SBs) there is no ability for them to right off loss against tax, they're intermediaries and don't have the luxury.

UK SBs are playing the markets themselves against clients, so fit into another type of business model, FutBet would be penalised under mainland Tax codes.

There's probably a better informed explanation than mine, but that's the gist of it.

FutBet aren't in Gibraltar for 'dodgy' reasons.

The FSA are currently approving them as well. They are subject to UK law.
Bit confused on your comment on UK SBs - from what I understand they are NOT playing the markets - in fact if you look at the IG float prospectus (which was a very interesting insight into the workings of a SB firm) they do not hedge only when the cost of hedging outweighs the benefits - i.e. they are non-prop.
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Old Sep 15, 2005, 4:33pm   #26
 
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zigglewigler started this thread The SBs aren't purely brokers, their income is not simply commission on trades executed. They do take positions themselves hence profit from the market, therefore are in part proprietory traders in terms of how they will write down the loss against tax.

FutBet are solely making money from comms on trades placed via IB on the clients behalf, who themselves hold the trade in the form of a SB, however a SB unlike any before offered.

That distinction explains why they're based in Gibraltar. Incidentally the authorities aren't issuing anymore licences, so FutBet should absolutely clean up with their operation.

Well my application is off, I'll stick with IB until all is set up and working as it should.

I'd still like to hear from those that have left IB for FutBet.
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Old Sep 15, 2005, 4:34pm   #27
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Does this help:

www.hmrc.gov.uk/manuals/bimmanual/BIM22015.htm
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Old Sep 15, 2005, 4:46pm   #28
 
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RE: Trade: Exceptions & alternatives: Betting and gambling

"an organised activity to make profits out of the gambling public will normally amount to trading"

If a man makes himself out, say physically collects bets from physical persons in the street, he may be acting in the course of a bookmaker. But if he hides himself in his private room, with a computer connected to the internet, expressing his opinion on the probability of something occurring via Betfair, can he be termed acting as a bookmaker in "an organised activity to make profits out of the gambling public"?

To make it more simple, if he is located physically away from where Betfair is located, another country, who is the gambling public?
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Old Sep 15, 2005, 5:07pm   #29
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RE: Trade: Exceptions & alternatives: Betting and gambling

"an organised activity to make profits out of the gambling public will normally amount to trading"

If a man makes himself out, say physically collects bets from physical persons in the street, he may be acting in the course of a bookmaker. But if he hides himself in his private room, with a computer connected to the internet, expressing his opinion on the probability of something occurring via Betfair, can he be termed acting as a bookmaker in "an organised activity to make profits out of the gambling public"?

To make it more simple, if he is located physically away from where Betfair is located, another country, who is the gambling public?
The answer to your question has to be "No"; it is not you who is the bookmaker.
Also it is clear enough that betting is not currently held to be a vocation.
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Old Sep 15, 2005, 11:05pm   #30
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TRIPLE WITCHING DAY TOMORROW GUYS & DOLLS
UK and US options [stock & indices] ALSO futrs contracts

Triple Witching
An event that occurs when the contracts for stock index futures, stock index options, and stock options all expire on the same day. Triple Witching Days happen four times a year: the third Friday of March, June, September, and December. This phenomenon is sometimes referred to as "Freaky Friday."



The final trading hour for that Friday is the hour known as triple witching. In this final hour, the markets are quite volatile as traders are quickly offsetting their option/futures order before the closing bell. If you are a long-term investor, then triple witching has a minimal impact on you.
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