There would be no issue for CFD. The issue is stocks as stocks are subject to 3 kinds of taxation:
- CGT
- income tax with rebate on dividend,
- income tax on the interest rate earned if the stock is borrowd and short sale.
What about loss on interest and dividend charge due to short selling ?
If you have a margin account and trace normal stock only:
- You pay income tax on dividend (40 % - deduction) and interest (40 %)
and capital gain tax on capital gain (28 %).
You have some interest charge due to margin financing as well as some dividend paid charge due to short selling:
-...