Tax-free trading question

Hi

In the UK, is spreadbetting the only way of ensuring that your trading profits won't be taxed?

Thanks in advance.

Jeff

Yes, but I believe the first £9,000 is free of capital gains tax anyway. This means that the advantages of spread betting are questionable since you'll probably make more with a good ordinary broker.

Thanks

How much would you say you could save in percentage terms by using a good broker vs a spread betting company?

Regards

Jeff

£10kLoser said:

Yes, but I believe the first £9,000 is free of capital gains tax anyway. This means that the advantages of spread betting are questionable since you'll probably make more with a good ordinary broker.

Click to expand...

Ferru said:

Thanks

How much would you say you could save in percentage terms by using a good broker vs a spread betting company?

Regards

Jeff

Click to expand...

This is a difficult question to answer as it depends very much on how often you trade. If you are a day-trader then a direct access broker will probably be more effective. You can also offset any losses against tax which you cannot do using SB companies.

If you do not day-trade and have longer term positions then SB is probably the better option because the efficiency of entry and exit spreads are less of an issue.


Paul

It depends on what instrument but and how you trade but I get 1 or 2 pips less spread on oil and since spread bet companies damp out movement, I get my limits hit easier. Trading straight off the charts in MetaTrader with FXPro, for example, is just so much nicer and must be a good 10% more profit. Of course, if you long-term trade these small differences aren't meaningful.