Difference between Spread betting and CFDs

tomorton

Legendary member
8,432 1,362
I can't believe I read all the thread and am still confused lol. If you trade daily as a day trader you pay income tax or if through a company corporation tax, right? CGT only applies if you are classified as causal trader or as investor. This sucks, anyone experienced with ltd setting up with either IB or ii?
You need to consider the means of access to the market also. Financial spreadbetting is exempt from personal taxation in the UK: CFD trading is subject to CGT, whether you are a day-trader or a casual trader.

If you set up a limited company through which you make spreadbetting gains, its possible that you would lose the advantage of personal exemption from taxation on these profits - in effect, the SB gains would no longer be your personal profits, they would be the company's profits, so you might end up paying tax as a result.
 

MariaRose

Member
53 3
I can't believe I read all the thread and am still confused lol. If you trade daily as a day trader you pay income tax or if through a company corporation tax, right? CGT only applies if you are classified as causal trader or as investor. This sucks, anyone experienced with ltd setting up with either IB or ii?
Even I need a clarity on how this tax thing works. Would be great if someone helps.
 
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guest41766

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If you’re earning a lot from trading and you’re not yet paying tax on your profits, the chances are that HMRC will come knocking before too long.

 
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Guest36985

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If you’re earning a lot from trading and you’re not yet paying tax on your profits, the chances are that HMRC will come knocking before too long.

And the relevant quote FROM the article you linked to.

"Do forex traders pay tax on Spread Betting and CFDs?
The type of instrument that you trade with affects the way that you’re taxed.

Spread Betting, for instance, is classed as gambling. As you don’t own the assets you’re betting on, you’ll not be liable to pay Capital Gains Tax or Stamp Duty on the money you make from it in the UK. "
😃
 
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guest41766

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CFDs you don't own the underlying, The HMRC will tax spread betting if your making substantial profits on a regular basis ie your full time. SB wont cocoon you from tax.
 
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Guest36985

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CFDs you don't own the underlying, The HMRC will tax spread betting if your making substantial profits on a regular basis ie your full time. SB wont cocoon you from tax.
The HMRC may change their rules and START to tax spread betting but they don't at the moment and its made very clear they don't IN the article you linked to.
 
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guest41766

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Trading CFD or SB there are 3 classes HMRC use speculative, self employed, private investor. If its a income your doing on the side or your results are inconsistent its speculative but if its something your doing full time for profit regardless of product used you are liable for income tax
 
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guest41766

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CFDs lower rate CGT is only 10%. But as said if trading FT your liable for income tax
 
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guest41766

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Considering what a risk it is to trade for profit in the first place to then start telling newbies the realistic tax proposition would put them off opening there SB accounts and the Gov getting tax thru the SB companies profits. Once you turn regularly profitable your liable for income tax regardless of what your saying about SB being tax free.
 
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guest41766

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CFDs are not per say charged income tax on: its only when your circumstances are taken into account
 
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Guest36985

0 0
Trading CFD or SB there are 3 classes HMRC use speculative, self employed, private investor. If its a income your doing on the side or your results are inconsistent its speculative but if its something your doing full time for profit regardless of product used you are liable for income tax
Do you have ANY evidence of a person being prosecuted for not paying tax on gambling winnings?
If not then please stop posting F.U.D in order to drum up business for accountants.
 
 
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