FCA concerns on Spreadbetting

This is a discussion on FCA concerns on Spreadbetting within the Spread Betting & CFDs forums, part of the Commercial category; With respect, to suggest that "all accounts should be limited risk" without regard for age, decades of experience and status, ...

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Old Dec 12, 2016, 6:32pm   #17
Joined Jul 2008
peakoil started this thread With respect, to suggest that "all accounts should be limited risk" without regard for age, decades of experience and status, is something I could not be more opposed towards.

Nonetheless, as some of us are aware, the German regulator, on reviewing the spreadbet industry very recently stipulated that the industry should change so that persons should lose no more than the funds in his/her account. On the face of it, that might seem to be quite a fantastic proposition for all of us. Some might even see such as a "have cake and eat it" proposition, but it most certainly wouldn't be!

Firstly, let's not forget that all black swan events are as out of the control of any spreadbet company, as they are for you and me. In other words, people should also consider that to expect the spreadbet firms to take on the added risk of all potential black swan events, while continuing to offer the same slim spreads, and generous margins, we've all become accustomed to using, is just not in the slightest bit realistic. That is to say, limited risk accounts will, undoubtedly be subject to wider spreads, and more demanding margin requirements - at the very least. The spreadbet companies are running a business after all. Nevertheless, slim spreads, fast execution and current margin levels are all absolutely vital to experienced clients, otherwise spread betting would be nowhere near as attractive as it always has been.

Yet of course newcomers &/or anyone else who feels that limited risk suits their needs, should unquestionably be protected, or, at the very least - offered protection, at least until they have gained sufficient experience; however, those of us who have had accounts open for many years must be given the option to continue as we've done up to now, on condition that we unquestionably continue to accept the potential liabilities to which we are open.

As for the proposition that advertising must be prevented with regard to spread-betting, I can't see how that would work, or would stand up to legal challenge - especially if other forms of gambling are permitted to continue advertising - without additional restrictions. We're talking about an industry which, in its entirety is contributing around £2.3BN (2014 figures) to UK GDP, and has an economic footprint of around £5bn. Also, because of the vast amounts of money involved in gambling advertising, this poster frankly won't be holding his breath for any changes in this area - no matter how 'good' some of us may believe such to be... Then again, it wouldn't be a bad thing at all, if greater prominence were given to the indisputably true facts within * all * gambling advertising - ie., that the great majority will lose, and that help is available to those few who develop gambling problems - help which, I might add, should always be funded, at least in part, by the industry itself.

Last edited by peakoil; Dec 12, 2016 at 7:00pm.
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Old Dec 13, 2016, 7:08pm   #18
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maybe a solution would be that when using high leverage you must use a guaranteed stop-loss?

especially less experienced traders
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Old Dec 13, 2016, 7:25pm   #19
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https://community.ig.com/t5/Latest-n...back/m-p/10752
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Old Dec 15, 2016, 7:47pm   #20
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http://www.forexfactory.com/showthre...03#post9347403
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Old Dec 16, 2016, 8:54am   #21
 
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Originally Posted by forker View Post
What part of the HMRC rule don't you understand? forget it i am talking to morons

Dont be so fast to insult others, you have misunderstood the quote from HMRC all gambling Including spreadbetting is tax free even if it is your only source of income.

The 'carrying on of a trade' refers to other income linked to your trading, so if your selling courses and using your trading results as the marketing then all income becomes taxable. as you like your HMRC quotes here's another one for you.

''The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.''
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Old Dec 16, 2016, 10:23am   #22
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Originally Posted by OLdNoob View Post
Dont be so fast to insult others, you have misunderstood the quote from HMRC all gambling Including spreadbetting is tax free even if it is your only source of income.

The 'carrying on of a trade' refers to other income linked to your trading, so if your selling courses and using your trading results as the marketing then all income becomes taxable. as you like your HMRC quotes here's another one for you.

''The fact that a taxpayer has a system by which they place their bets, or that they are sufficiently successful to earn a living by gambling does not make their activities a trade.''
If you are going to argue hmrc quotes agenst me you really need to be more thorough. Firstly where exactly in the legislation where it says carrying on or a trade does it refer to other incomes? It doesn't, you're adding that yourself because it isn't there.

To be clear your quote comes from hmrc manual BIM22015 where it also contains this

The taxpayer placing a spread bet is not normally carrying on a trade (see BIM22020)

Its in BIM22020 where it describes

To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.


There is another thread where a ceo of a spread betting company has also answered this

http://www.trade2win.com/boards/spre...ml#post2846802

So in short, you are speak a load of tosh. Do your homework and stop cherry picking to suit your opinion
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Old Dec 16, 2016, 10:37am   #23
 
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Originally Posted by forker View Post
If you are going to argue hmrc quotes agenst me you really need to be more thorough. Firstly where exactly in the legislation where it says carrying on or a trade does it refer to other incomes? It doesn't, you're adding that yourself because it isn't there.

To be clear your quote comes from hmrc manual BIM22015 where it also contains this

The taxpayer placing a spread bet is not normally carrying on a trade (see BIM22020)

Its in BIM22020 where it describes

To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.


There is another thread where a ceo of a spread betting company has also answered this

http://www.trade2win.com/boards/spre...ml#post2846802

So in short, you are speak a load of tosh. Do your homework and stop cherry picking to suit your opinion

The case of Graham v Green [1925] 9TC309 concerned a man whose sole means of livelihood came from betting on horses at starting prices. Rowlatt J says at pages 313 and 314:


spreadbetting is gambling, gambling profits are not taxable even if they are the sole source of income.

I will say no more on this matter, as you say everyone can do their own homework, not trying to convince anyone here just pointing out that you shouldn't be insulting the community here because you believe your view is the only one that's right.
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Old Dec 16, 2016, 10:46am   #24
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What part of carrying of of the trade don't you understand?
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