Is the tax-free benefit of UK spreadbetting firns worth it?

qwertyuiop1

Member
81 3
THE obvious advantage of UK spreadbettng is that it is tax free.

BUt ui read elsewhere some guy saying that the spreads are far bigger - and that if you use a non uk platform, while you would be taxed, it all basically evens out in the end as thei rother charges are so little in comparison.

IS this true? Tax free seems a huge benefit - but admittedly I have not figured out to what degree precisely,
 

Jason101

Experienced member
1,365 212
Spread betting becomes more cost effective as the length of the trade extends. So the question you are asking would have to take into account the trading style. Someone trading in and out all day would see the spreads adding up where as a swing trader would not so much. But the spread bet firms do try quite hard to encourage over trading.
 

tomorton

Legendary member
7,157 931
I feel the tax liability from trading is a problem that only needs solving once you've got it.
 

0007

Senior member
2,159 518
Tomorton raises a valid point. But unless you are very short term trader where spreads et cetera assume greater significance, one very large advantage with SB is its simplicity with respect to accounting – ie there isn't any as far as tax is concerned. I think with trading it is far too easy to get tied up with the nuts and bolts minutiae of spreads and indicator/system tweaking while ignoring the big picture of whether your trading actually works profitably. As far as I'm concerned SB is just one of the tools in my trading toolbox.

I came to the conclusion a long time ago that the less need there is for legal interaction between me and the taxman, the happier we will both be. Works nicely for me.
 
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barjon

Legendary member
10,207 1,522
You can’t get much better than the 1 point spread most SB’s give on ftse, Dow, nasdaq etc.

For shares, spreads from reputable SBs are much more competitive vis a vis the market than they used to be. Despite the wider spreads than the market proper SBs are still cheaper if you want leverage and you are facing minimum commission on CFDs. As your position size becomes larger there comes a tipping point where CFD becomes the cheaper option and this is variable depending on the particular share (and its SB spread) that you are contemplating.
 
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