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0FXTrader0
They wont be trading with spread bet providers once they reach the winning line.
Difference between Spread betting and CFDs
- Thread starter small_bites
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That's OK, perhaps you have evidence of such a trader - one who has switched to another form of trading to avoid taxation on SB winnings?
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0FXTrader0
Why do family offices, large corporations, limited companies, prop traders NOT hold accounts with a spread bettor then. Why is there a CFD offering along with the spread bet offering.
There will be many possible answers to both these questions but without evidence to support your particular theory, that's all it is, theory.
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0FXTrader0
If you look up companies with SIC CODE 64991 on a UK company search or look at any prop firms that are registered with the futures exchanges you will have your evidence.
CFD's are used by professionals the pricing is direct from prime broker liquidity wrapped as a synthetic CFD product it is the interbank price but the counterparty is your broker.
CFD's are used by professionals the pricing is direct from prime broker liquidity wrapped as a synthetic CFD product it is the interbank price but the counterparty is your broker.
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0FXTrader0
some CFD providers match prime broker liquidity do your research
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0FXTrader0
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Why are they not all spread betting then. Welcome to our London office come and trade tax free in the UK.
There are reasons why particular people use CFD's. But avoidance of tax on SB cannot be shown to be one of them without specific evidence.
In any case, its a strange argument to make when CFD's are without any dispute subject to tax - that people avoid SB to avoid tax and so they use CFD's which are taxed.........
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0FXTrader0
At the retail level look at Etoro and Darwinex they do not offer spread betting and have the option to copy/follow profitable traders. If your struggling to profit from spread betting why not try following profitable traders trading CFD's and paying there fair share of tax according to there country of residence. You to can then contribute some tax rather then line the betting companies pockets.
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0FXTrader0
The advantage of CFD's over spread bet is the spread/liquidity/execution yes your crappy broker if the counterparty but to establish prime of prime brokerage is a large investment.
0FX, are you a retail trader?
and the advantage of spreadbetting over CFDs is one is taxable and the other one isnt, (unless you are carrying on the business of trading). HMRC have lovingly spelled it out for you.
Yes, its true, the spread and overheads on large accounts are much lower than if SB were used. But this is no argument to show that SB winnings are taxable.
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0FXTrader0
Spread betting you don't get the same fills as direct market access via CFD. The market maker (spread bet provider) marks up the price.
SB winnings are not taxable if your not trading profitably year in year out. You obviously not engaged in a trade if you take regular losses each quarter/year.
SB winnings are not taxable if your not trading profitably year in year out. You obviously not engaged in a trade if you take regular losses each quarter/year.
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0FXTrader0
When you have made two years of profits and breached the tax free allowance then start to worry about HMRC
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0FXTrader0
In terms of the weight of evidence professional traders running limited companies and prop firms engaged in trading where is your evidence of profitable traders spread betting for 2+ yrs profitably, myfxbook link welcome.
you're just not getting it 0FX
if you are carrying on the profession of trading, you are indeed liable to tax. read this thread, i have as well as others have tried to spell it out for you
carrying on the business of trading means you might be a broker. you might be a dealer working in a financial institution.
that is their "profession". noone should be disputing this if you read HMRC. they are "carrying out the business of"
however, spreadbetting 24/7 and making a ton of money, regardless if its over your personal allowance, is NOT constituted as a profession. it doesnt matter if its the only thing you do each day. its still gambling. if i log into IG index every day for the rest of my life, i am not employed by IG index. I am just a gambler 24/7. i am not providing a service, i am merely using a service
Now, if i am a broker, and i spreadbet and i make money from that spreadbet..i have just crossed the line. I am "carrying on the business of..."
please mate. read HMRCs notes. if you are from the UK of course
it really is getting old when people fail to do the research.
From HMRC website:
‘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.’
Obviously you myth busters (and that includes all those that liked this post) seem to hold a belief that in every case, for every person that spread bets, the only outcome is being tax free.
so please do come forward and enlighten me on why there is mention of it being taxable if according to you its a myth? So you can come and tell me this forum has discussed this for years, its pointless.
and since you mentioned forum. here is an hmrc forum with hmrc responding to this very question.
hallelujah someone can read..there's another FX on here who can'tit really is getting old when people fail to do the research.
From HMRC website:
‘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.’
Obviously you myth busters (and that includes all those that liked this post) seem to hold a belief that in every case, for every person that spread bets, the only outcome is being tax free.
so please do come forward and enlighten me on why there is mention of it being taxable if according to you its a myth? So you can come and tell me this forum has discussed this for years, its pointless.
and since you mentioned forum. here is an hmrc forum with hmrc responding to this very question.
MasterOfCoin
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Sigh.
'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.'
Ergo.
If you are providing a service to clients whether public or private (ie trading) and you carry out spreadbetting as well as or as part of that service, then you may be liable for tax on spreadbetting depending on the terms of contract and economic substance of what you have done.
If you are simply spreadbetting on your own account with your own money privately and not as part of any business activity, then you are NOT liable to be taxed on that, no matter the amount or extent of your gains. Period.
Private retail trading does not constitute, equate to, nor can it be classified as running a business.
It is not the activity of an employee. It is not an activity employing others.
Neither is it self-employment.
It is in no way comparable to or the equivalent of running a business and to interpret it so is to completely obfuscate any meaningful definition of what constitutes a trade, service or business activity.
Thus spreadbetting as an individual on your own account is NOT liable to tax.
'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.'
Ergo.
If you are providing a service to clients whether public or private (ie trading) and you carry out spreadbetting as well as or as part of that service, then you may be liable for tax on spreadbetting depending on the terms of contract and economic substance of what you have done.
If you are simply spreadbetting on your own account with your own money privately and not as part of any business activity, then you are NOT liable to be taxed on that, no matter the amount or extent of your gains. Period.
Private retail trading does not constitute, equate to, nor can it be classified as running a business.
It is not the activity of an employee. It is not an activity employing others.
Neither is it self-employment.
It is in no way comparable to or the equivalent of running a business and to interpret it so is to completely obfuscate any meaningful definition of what constitutes a trade, service or business activity.
Thus spreadbetting as an individual on your own account is NOT liable to tax.
