In a past life I was involved in trading 15-day oil cargoes (including resultant tax hassles) and there's something about this thread that's been tugging at my sleeve. The thing is can you (whether by accident or design) take or pass title to the stocks? Clearly not in SB but yes in the case of options and futures. After all in theory you may yet have to buy those 10000 July Corus shares you shorted if the chips fall awkwardly. Is this potential for delivery of goods or services not the tax guts of it rather than what our main income is or how much we might make ? I guess one test of this would be the tax treatment of profits from CFD's. Are these taxable even although you can't take delivery of the underlying instruments? By the same token what is the basis for taxing any profits from options/futures betting on indices when the underlying instrument doesn't even exist ? Surely this is a better question for the Revenue or our worthless accountants?
Regards
Regards
Worthless accountants? mine makes a fortune out of me.
And in a past life I was an african nubile queen imprisioned on a donkey farming ranch, hence, the funny walk.
(Sorry; after 6 pints it seemed funny. Who put the weekend in the way of trading!)
And in a past life I was an african nubile queen imprisioned on a donkey farming ranch, hence, the funny walk.
(Sorry; after 6 pints it seemed funny. Who put the weekend in the way of trading!)
CityTrader
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My final point, for what it's worth, is that CFD's are most definitely taxable- SB's probably not, and another reason is, that on SB's the firms pay "corporate gaming levy/tax" which is why the commission(spread) is higher( spread wider) than on cfd's.
Masterful
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Spreadbetting
HM Customs and Excise recognizes that profits from spreadbetting under UK law are not subject to income tax or capital gains tax.
http://www.londoncapitalgroup.co.uk/prospreads/whybet.html
HM Customs and Excise recognizes that profits from spreadbetting under UK law are not subject to income tax or capital gains tax.
http://www.londoncapitalgroup.co.uk/prospreads/whybet.html
Bigbusiness
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So why do they have an* at the end of the sentence?
Mr. Charts
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No, it means tax laws can change.
Re: Spreadbetting
I thought (possibly wrongly) that it was the Inland Revenue not C&E that are responsible for Income and Capital Gains Taxes.
If that is the case then the fact that the IR do think they can tax betting income is a bit more relevant and ProSpreads advice seems a little on the shoddy side.
wysi
Masterful said:
I thought (possibly wrongly) that it was the Inland Revenue not C&E that are responsible for Income and Capital Gains Taxes.
If that is the case then the fact that the IR do think they can tax betting income is a bit more relevant and ProSpreads advice seems a little on the shoddy side.
wysi
TraderPattern
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Bear in mind that if spread betting companies start charging tax on people who punt stocks through them, they will also have to start charging tax on people who punt spreads on football penalties, corners, boxing matches and whatever else the SB offers bets on i.e. people would end up going to the high street bookie and spread betting companies would go out of business.
frugi
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An enjoyable plough thro' this thread throws up a couple of points I'd like to mention.
Having gone through a similar thought process to as jls, I am unusually eager to take out an interest only fixed rate mortgage for five years (on the flat I own) as the cost of capital is so small. I cannot see any valid objection to the idea of borrowing 50k at, say, 4.29% and then trading that capital very conservatively to net, say, a very safe 7% annual return.
Over five years this would net slightly less than 10k profit, at which point I pay back the mortgage company the original 50k and trouser the difference. Now 10k will be baby Jersey Royals to some of you I know, but I'm not one to sniff at virtually (risk) free money. Obviously some form of direct debit would have to be sorted out from my trading account to ensure a monthly stream of income to match the outgoing mortgage payments but otherwise the hassle seems very small.
I am fortunate enough to be able to avoid the self-certification interest rate hike as my girlfriend is in full time employment and so the mortgage can be in her name, though I imagine I'd have to alter the title deeds so she owns a half share of my flat. I have knocked up a fairly crude spreadsheet that takes account of the outgoing interest payments and the trading income and nothing seems to look awry. I am just wondering why more people who are in the agreeable position of owning their properties aren't keen on the idea as (barring an idiotic spell of losses that would reduce the projected 7% return- perhaps this is the reason?) it seems to me like the closest thing to a free lunch one can borrow. Or perhaps my sums are painfully misguided?
Regarding the tax / spreadbetting issue I have possibly helped to keep the taxman off my back by actually claiming back a little income tax from him each year, mainly from taxed interest on cash held on deposit, as my principal income is from spread betting and my other "official" income is well below my personal allowance. The annual ritual of the R40 rebate form keeps me in the system while not, I hope, arousing excessive suspicion, although one day I expect someone will wonder how a 29 year old manages to live on 3k a year!
PS Apologies for butchering a fine verse, but...
"You may say that by and large it is Skimble who's in charge
Of the zero sum Express.
From the swinger* and the scalper to the FirstWaves talking large
She will supervise them all, more or less."
Superlative factual tinternet burrowing and erudite (as ever) demolition of Mr. Elliot (the two ll-ed version, not the poem's author), skimbleshanks, if I may be so bold!
*Of course I innocently refer to position traders not the swinging devotees of Fever (who I imagine trade positions fairly often too!)
Having gone through a similar thought process to as jls, I am unusually eager to take out an interest only fixed rate mortgage for five years (on the flat I own) as the cost of capital is so small. I cannot see any valid objection to the idea of borrowing 50k at, say, 4.29% and then trading that capital very conservatively to net, say, a very safe 7% annual return.
Over five years this would net slightly less than 10k profit, at which point I pay back the mortgage company the original 50k and trouser the difference. Now 10k will be baby Jersey Royals to some of you I know, but I'm not one to sniff at virtually (risk) free money. Obviously some form of direct debit would have to be sorted out from my trading account to ensure a monthly stream of income to match the outgoing mortgage payments but otherwise the hassle seems very small.
I am fortunate enough to be able to avoid the self-certification interest rate hike as my girlfriend is in full time employment and so the mortgage can be in her name, though I imagine I'd have to alter the title deeds so she owns a half share of my flat. I have knocked up a fairly crude spreadsheet that takes account of the outgoing interest payments and the trading income and nothing seems to look awry. I am just wondering why more people who are in the agreeable position of owning their properties aren't keen on the idea as (barring an idiotic spell of losses that would reduce the projected 7% return- perhaps this is the reason?) it seems to me like the closest thing to a free lunch one can borrow. Or perhaps my sums are painfully misguided?
Regarding the tax / spreadbetting issue I have possibly helped to keep the taxman off my back by actually claiming back a little income tax from him each year, mainly from taxed interest on cash held on deposit, as my principal income is from spread betting and my other "official" income is well below my personal allowance. The annual ritual of the R40 rebate form keeps me in the system while not, I hope, arousing excessive suspicion, although one day I expect someone will wonder how a 29 year old manages to live on 3k a year!
PS Apologies for butchering a fine verse, but...
"You may say that by and large it is Skimble who's in charge
Of the zero sum Express.
From the swinger* and the scalper to the FirstWaves talking large
She will supervise them all, more or less."
Superlative factual tinternet burrowing and erudite (as ever) demolition of Mr. Elliot (the two ll-ed version, not the poem's author), skimbleshanks, if I may be so bold!
*Of course I innocently refer to position traders not the swinging devotees of Fever (who I imagine trade positions fairly often too!)
The possible tax on spread bets, phone all the Spread Betting firms and ask them if you have to pay any kind of tax on profits made spreadbetting. I think they will say a clear NO, why do you think they are called Spread BETTING firms the answer to the tax question is in the name, as betting is free of any kind of tax, Go in the bookmakers and ask the same question about tax on winnings ,it was removed some time back . regards Twiglet
the tax is in the spread when you take the bet in spreadbetting so you pay tax effectivly on the bet - win or lose
but there was always an issue as to whether a consistent winner in gambling could escape tax as the wins might be treated as profit or income
i know it arose with professional gamblers in horse racing and i guess they won based on their inside knowledge and i recall them getting hit for tax
i doubt the situation has arisen in spreadbetting as they dont have consistent winners, but i am pretty sure that spreadbetting companies will not guarantee that you would not pay tax on winnings
but there was always an issue as to whether a consistent winner in gambling could escape tax as the wins might be treated as profit or income
i know it arose with professional gamblers in horse racing and i guess they won based on their inside knowledge and i recall them getting hit for tax
i doubt the situation has arisen in spreadbetting as they dont have consistent winners, but i am pretty sure that spreadbetting companies will not guarantee that you would not pay tax on winnings
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