Question for UK traders

Just wondering if there are any UK based traders out there using forex brokers rather than spread betting? If so, do you know what the tax implications are in the UK with using this method?

I currently spread bet, but can see a few advantages of brokers. However, I'm keen to also gauge the disadvantages of switching.

Cheers in advance.

Don't think u can autotrade via spread betting firms. IMO autotrading is the only way for me. Also the platforms are very dangerous, if u have 'fat fingers' u could be in serious trouble.........

Cheers Charlie

Hi

I always found that it was cheaper to pay the tax than deal with spreadbetting companies, my experiences with SB were not good

Cheers

Nut

But is it considered as income (and therefore liable to income tax) or capital gains (and therefore liable to CGT) ... or is it considered as something else?

Cheers for your help.

Ah, just managed to find this on CMCs website ...

"when you trade our Forex product you are liable to capital gains tax. However when you Spread Bet on currencies all profits are exempt."

... so assuming you are successful at trading and had annual profits greater than the £8800 exemption amount for 06/07 (and also are/went into the higher tax bracket) you'd be paying 40% tax on all profits (over £8800).

Say you were in the higher tax bracket, made 200 pips per month and bet £10 per point. Profits for year would be 24k and you'd pay over 6k in tax.

I understand the advantages of forex trading over spread betting, but that's quite a chunk to be giving up!

Lets see a show of hands. Who's using spread betting and who's using a forex broker?

70% of my trades are spreadbet.
I spreadbet spot only, on rolling contracts for a maximum of two "roll-overs"
I dont do the futures on spreadbet as i just find them difficult when making trade decisons on the metatrader spot price.

so i use fxcm (for my sins) for trade decisions that i intend to have a longer time frame on.