tax implications

[paul noble]

Does any one know the tax implications of spread betting in the u.k. and also for australia???

 

[FetteredChinos]

http://www.trade2win.com/boards/showthread.php?t=7648&highlight=spreadbetting+tax


another can of worms.. this one is full to the brim.

 

[paul noble]

http://www.trade2win.com/boards/showthread.php?t=7648&highlight=spreadbetting+tax


another can of worms.. this one is full to the brim.

i was told it was tax free in the u.k

 

[FetteredChinos]

well it is, unless you have a major "moment" and disclose your earnings to the taxman.

 

[waverider]

Don't take this the wrong way Paul but please read the full thread FtteredChinos has pointed you to, its all there and shows how confused the situation is. Another thread isn't warranted.

WR

 

[CarpeUK]

Does any one know the tax implications of spread betting in the u.k. and also for australia???

Paul,

In a nutshell, Spread betting in the UK is TAX FREE. If anyone tries to tell you otherwise phone your local tax office and ask them they will tell you.

As for Australia i do not know.

 

[PeterTT]

It is tax free as it is a bet .. the losses are not tax deductable, so, the wins are not subject to income tax.

 

[FetteredChinos]

what losses? :cheesy:

 

[AlexAndrews]

well it is, unless you have a major "moment" and disclose your earnings to the taxman.

Don't you mean a "senior moment"?

 

[FetteredChinos]

shhh, im only 26 lol...

if im going senile now, then i am deeply worried

 

[coolcola]

i wonder why the UK government allows spread betters to keep their $$ (from spread betting) tax free... do they want to encourage this trade??

 

[Anonymous]

It's a test to see if people can understand the rules, if they tell you:

1. Do this and this = tax free
2. Do that and that = taxable

If they want you to pass a tax free test to see whether you are following the rules, what do you do?

 

[commanderco]

Tax Departments around the world realise that 95% of Traders lose money
and therefore you may well find that there are no defined rules specific to trading for this very reason.
However there is an overwhelming litmus test which simply states that if you engage in an activity for reasons of profit, then that profit is taxable. The burden of proof as always falls on your shoulders.
Bear in mind that your trading must be profitable in order that this litmus test be applied.
You cannot claim that you tried to be profitable but the market chose otherwise.
Also, the Tax Dept will take the profit in the year that it was earnt, so be very careful that you do not allow these matters to slide otherwise they will be applying interest & penalties to a profitable year some time ago even if you have recorded losses ever since.

Be careful, be very very careful ... trading is a very dangerous game in all respects.

 

[starspacer]

i wonder why the UK government allows spread betters to keep their $$ (from spread betting) tax free... do they want to encourage this trade??[/QUOTE

Think about this carefully. 90% of traders lose money. SB firms are taxed on client losses. So this is the same as a tax on 90% of customers. Another way of saying this is that part of your (almost) inevitable loss is tax.

On a purely commercial basis, the Government is applying a highly efficient tax which effectively applies to 90% of people.

Oh, and on the subject of taxation, if the Revenue can prove that you are pursuing a "deliberate and organised scheme of profit making" then you will be treated as a professional trader and taxed accordingly. So I guess this accounts for part of the remainder of the 10%, the exception being the periodic spread better.

Sorry to disappoint anyone but forewarned is forearmed and all that....