Inland Revenue

[theroguetrader]

" someone " from HMRC recently said (sounded like they were REALLY not sure tho), suggested forming a LTD company and transfer SPREAD BETTING profits through this - to then be taxed on.... !! :-0

Then i spoke to a " Senior Manager " - who basically GIVE THE IMPRESSION - he just " didnt really want to talk about it " - AND " they " let " spreadbetters " just get on with it..!!
(turn a blind eye so to speak) -

can anyone please give a DEFINITIVE explanation of how they view this AND the trading world - (they just sound so " clueless) " - :-0

 

[grantx]

RT,

All betting is tax-free - that's what they don't like. Howevr, as someone pointed out elsewhere on T2W, if they started to tax your winnings, they would probably have to allow you to offest any losses against your tax.

I'm sorry RT, but as I say to anyone requesting details re aspects of taxation, your name goes into my book of "supsicious characters" for possible future reference should I have to cop a plea with the IR.

Grant.

 

[LION63]

" someone " from HMRC recently said (sounded like they were REALLY not sure tho), suggested forming a LTD company and transfer SPREAD BETTING profits through this - to then be taxed on.... !! :-0

That would be asking for trouble. I wonder what the logic behind the suggestion was as there is no benefit to be gained from doing so. I would go as far as to say that the individual in the HMRC is probably a cleaner as the idea is very daft.

Spread betting for most individuals is tax free and will remain so until legislation is changed (highly unlikely).

 

[theroguetrader]

RT,

All betting is tax-free - that's what they don't like. Howevr, as someone pointed out elsewhere on T2W, if they started to tax your winnings, they would probably have to allow you to offest any losses against your tax.

I'm sorry RT, but as I say to anyone requesting details re aspects of taxation, your name goes into my book of "supsicious characters" for possible future reference should I have to cop a plea with the IR.

Grant.

sorry to ask - who was (requesting details - re - taxation)..? surely the suspicious character/s are the DIMWITS at the IR that give conflicting information in the FIRST place..

 

[theroguetrader]

RT,

All betting is tax-free - that's what they don't like. Howevr, as someone pointed out elsewhere on T2W, if they started to tax your winnings, they would probably have to allow you to offest any losses against your tax.

I'm sorry RT, but as I say to anyone requesting details re aspects of taxation, your name goes into my book of "supsicious characters" for possible future reference should I have to cop a plea with the IR.

Grant.

and those same suspicious characters were no doubt part of the same group that run on the NR... !! -(does the IR give extended lunch breaks)..? :-0
or loosing half the populations details off a few computer disks -


so i take it its NOT a good idea to open a company like the (nice lady) said at the IR..?
If THEY dont know - how is ANYONE ELSE...?????????????????? :|

 

[foredog]

The way they explained it to me for CFDs was, IF you trading them full time and this is your only source of income, then you are liable for income tax, otherwise they would be liable for CGT, so i'd reason that the same applies for SB, if you dabble a bit it's tax free, if you do it all the time - income tax.

 

[ns1000]

and those same suspicious characters were no doubt part of the same group that run on the NR... !! -(does the IR give extended lunch breaks)..? :-0
or loosing half the populations details off a few computer disks -


so i take it its NOT a good idea to open a company like the (nice lady) said at the IR..?
If THEY dont know - how is ANYONE ELSE...?????????????????? :|

Spread Betting is free from Capital Gains tax only. If you spread bet as a limited company, the company will have to pay Corporation tax on its net profits. Unless you're a consistently bad trader and want to offset your trading losses against company profit elsewhere, you're probably better off ignoring the IR advice.

 

[grantx]

But isn't it the case that gains from betting don't need to be declared? If not, then why isn't horse racing included? What is difference between betting on a horse or a financial instrument. And isn't this dilemma for the IR.

I'm referring to individuals here, not companies.

Grant.

 

[ns1000]

Profits from shares etc generally are treated as Capital Gains. Gambling profits are free from Captial Gains Tax. Businesses however do not pay CGT, but are instead liable to pay Corporate Tax on their profits. So yes, gains from betting don't need to be decalred for CGT assessment by individuals. Businesses however cannot gamble. A business cannot game as its purpose is a vehicle for making money. Profits from 'betting' for a company would therefore be from a business activity and subject to corporate tax in the same way as any other profits. It's similar to investing a houses - under UK tax law, your principal residence does not attract CGT, but a property company making an investment in a house would have to pay tax on a similar gain.

What this does mean though is that a higher rate tax payer may be better of trading CFDs through a company and paying Corporation tax at 28% or 30% than at his marginal tax rate of 40%.

 

[theroguetrader]

Spread Betting is free from Capital Gains tax only. If you spread bet as a limited company, the company will have to pay Corporation tax on its net profits. Unless you're a consistently bad trader and want to offset your trading losses against company profit elsewhere, you're probably better off ignoring the IR advice.

Thanks very much for your help with that - you see what i mean about conflicting information though..?
If the " professionals themselves " arent sure about the advice their giving and are all over the place, how are us mere mortals supposed to get it.. ?!

 

[HOLLY]

Its betting so tax is paid....

" someone " from HMRC recently said (sounded like they were REALLY not sure tho), suggested forming a LTD company and transfer SPREAD BETTING profits through this - to then be taxed on.... !! :-0

Then i spoke to a " Senior Manager " - who basically GIVE THE IMPRESSION - he just " didnt really want to talk about it " - AND " they " let " spreadbetters " just get on with it..!!
(turn a blind eye so to speak) -

can anyone please give a DEFINITIVE explanation of how they view this AND the trading world - (they just sound so " clueless) " - :-0

If you think about it - the SB companies pay tax on their earnings which is akin to the 6 or 9% punters can pay when placing bets in a betting shop (in uk) so that their winnings arent taxed. that way the IR receives tax or every s bet win or lose.

If they taxed SB'ing then losses would be deductable (which would be good for me at the moment ) but the extra headache would most likley cost more then it brings in from the IR's point of view and if they are getting tax in some form from every bet placed in the form of tax paid by the end SB company it make things easier for them. I know that professional traders losses can be offset agains capital gains and there is more regulation - so all in all its right that tax should not be applied to winnings at it is betting rather than investing/trading in the professional sense particulary when were not talking about millions and millions of pounds.

The truth is most SB punters lose more than they win in the long term so the net effect would be revenue loss as us mugs would be able to off set losses against our tax bills.

The way I see it the IR gets more tax the current way and would lose out if they tried to tax winnings from both more complex accounting and processing as well as off sets on losses.

For example imagine if all horse/football bets which were loosers could be off set against tax - the ir would lose massive amounts of revenue.

If you want to trade professionaly and pay tax - use CDFs or real futures contracts using apps like tradestation etc...