Tax free or not? Is the debate over?

[ibetfinancials]

All,

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[tar]

Maybe it's time we had an IBET thread. Their site is short on detail.

yeah

 

[ncfc]

yeah

like i posted earlier, its here....

http://www.trade2win.com/boards/fut...ding-using-tt-stellar-cqg-ibetfinancials.html

its in the wrong place

 

[tar]

PC from CMC markets was asked this on his q&a trad2win thread. I think he then consulted his in house lawyer and put a reply on his thread.

I should dig up that reply, but i cant be bothered at this time of night.
From memory PC said something along the lines of .. if what you are doing is gambling then SB profits are are not taxable.

So when is Spread betting not gambling?

Im not sure, but i can think of a few grey areas:

1. Arbitrage, say you are exploiting pricing differences across 2 spread bet firms and pretty much guaranteeing a profit for yourself. This used to possible in the early days of internet spread betting.. not so easy anymore.

2. Market making. Paz is quoting some marketing material from Kyte. I assume they have a few profitable ex prop firm traders who are using their spread betting offering via the DMA wrapper. Now if the trader is using a DMA wrapper for Market Making style of trading (eg putting out buy and sell orders very close together at the same time) and the majority of his profits are from capturing the bid/ask spread, then that might not be considered gambling by HMRC, even though a spread bet wrapper is used. (I may be completely wrong, HMRC may have no problem with this at all).


But for the majority of spread bettors, even full time 'sole income' ones, who are just making directional punts, yeah, not taxable.

I think you may be right , i was reading in HMRC site and it seems it doesn't matter if it is your sole income or not , what matters if it is a trade , like bookmaking where profits are expected in the long run , that's not punting (uncertain ) , so yes systemic Arbitrage and market making through Ibetfinancials could be taxable .

"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. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done."


"There are exceptional circumstances where a trader may enter into a ”bet” in the course of trading activities. An example would be where the ”bet” is used to hedge the interest rate on a loan for the business."

talking about bookies .... "The key feature is that the taxpayer is likely to be involved in the organisation of the activity. They are not mere punters. They are carrying on an activity where the odds are in their favour."

 

[riogordo]

From what I understand is to qualify as a "Bet" the bet must have an end date. So I guess this counts as "carrying on of the trade"?

 

[tar]

From what I understand is to qualify as a "Bet" the bet must have an end date. So I guess this counts as "carrying on of the trade"?

I don't think that's what they meant , BTW all bets have an expiry date i checked my IG index account all spot forex and cash bets expires at 2016 .