Here you go Tom, with case examples as well. this is from HMRC
"The profits or losses from gambling or wagering contracts are outside the scope of Income Tax"
you must be "in the profession of gambling" to be taxable. there are a couple of exceptions, around hedging, they too are only relevant based on the profession
“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.”
goes on to say what they consider to be a bet..
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22020
“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.”
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22017
“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.”
“This shows that having expertise or being systematic (‘studying form’) is not enough to create a trade of being a ‘professional gambler’.
Some ‘professional gamblers’ do carry on a trade, for example, where they receive appearance money for appearing on television programmes. They are providing a service to a customer (the television production company) for reward.
In Down v Compston [1937] 21TC60 a professional golfer attached to a golf club habitually engaged in private games of golf for bets of varying amounts and won substantial amounts. He was found not to be liable to tax on professional income on the basis that the bets did not arise from the playing services and that there was no organisation to support the view that he was carrying on the business of betting on the games of golf.
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56900
For individuals and others not within the charge to Corporation Tax the position is different. In such cases you will need to examine the contract to see if it is a gambling or wagering one. There is guidance on this at
BIM22016. The profits or losses from gambling or wagering contracts are outside the scope of Income Tax (see
BIM22015). However, this will not apply if the spread bet is used for a commercial purpose such as a hedge where the guidance at
BIM56880 should be followed.
What is a bet
The first, and obvious, question is simply what is a bet? A definition of a bet or ‘wager’ was given by Hawkins J in Carlill v Carbolic Smoke Ball Company [1892] 2QB484 and has been followed in later cases:
‘It is not easy to define with precision what amounts to a wagering contract, nor the narrow line of demarcation which separates a wagering from an ordinary contract; but, according to my view, a wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent on the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or other stake; neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties. It is essential to a wagering contract that each party may under it either win or lose, whether he will win or lose being dependent on the issue of the event, and, therefore, remaining uncertain until that issue is known.’