spread betting

does anyone here spread bet?

If so who with?

Cheeers

hey there

i spreadbet forex, i used to have a forex account but now i spreadbet as i find it easier to know the exact amount im trading and it stays in my home currency (£) aswell, however there are a few drawbacks. my broker is IG Index, i would really recommend them.

I spread bet with CMC. No complaints other than the charting is crap. I use an Alpari demo for charts.

Tim

Hi, i spreadbet with IG Index, no complaints with them so far, (been with them about a year) the great benefit with spreadbetting in the UK is the fact that it's tax free

hi

can u know why uk did this... isn't uk will loss some cashs coz no taxes?

AFAIK but I may be wrong SB winnings are classed as gambling winnings and if they taxed your wins then you should also be able reclaim against your losses, which means they would lose out overall.

Tim

With the advent of the internet, many bookmakers set up offshore offices so that they did not have to pay UK taxes, and also the punter did not have to pay a 9% tax up front on the bets they made, and the government was losing a lot of tax on the profits of the bookmakers. So in about 2001 -2002 I think, tax on winnings was abolished. By scrapping the tax on winnings many more people were encouraged to gamble, and the government was able to collect tax on profits made by the bookmakers, and as it is a fact that more people lose than win, whether that's on spreadbetting or any kind of gambling they collect more this way than taxing the punter, and as has been pointed out, most traders are part time, and the majority lose money, so this could be offset against tax on earnings. All I can say is I hope things carry on as they are, I hate givinng money to Gordon Brown.

Seeing as we're on the subject, any idea what the tax situation is if (hopefully) my only income comes from trading with spread bets? Some say I'll have to pay income tax as it's my main income, others say still no tax.

Anybody in this position already?

Tim

If your only income is from spread betting then it is classified as normal income and therefore becomes taxable. It is only tax free if it is not your main source of income; for example if you also have a day job.

To Maxey:
Speadbetting is like gambling so the bookmakers are taxed on revenue not the punters. Same system as with horse racing except this is financial betting.

the only drawback i find with spreadbetting with IG index is the 8pm rollover, other than that i find spreadbetting alot better especially for intraday trading, for more long-term trading u might be better off with forex.

to avoid tax on spread betting if you wish to have it as an income would be to get another side job, say 4-8 hours a week (preferably on weekends, when the market is closed ) then you can say that is your primary income.

i thought that you get spread betting profits tax free anyway?

My own thinking is that if the revenue started going after people
who make money SBing then it would get reported widely, the
end result being to kill the spread betting industry (New account
openings will plummet for sure) and no tax will be raised
from it anymore.. Gordon knows he makes more money taxing
the SB losses. Incidentally, IG Index published their pre-tax profits for the year to May 2008 on their website http://www.igindex.co.uk/spread-betting/about-us.html

"IG Group companies have over 72,000 clients worldwide making over 1 million transactions a month, over 90% of them online. In the year to May 2008, the Group achieved a turnover of £184m (an increase of 51% from £122m in 2007), and generated a record profit before tax of £97m (up from £69m in 2007)."

For those interested go to the Inland revenue website, this link deals with betting.
http://www.hmrc.gov.uk/manuals/bimmanual/bim22015.htm

I will quote from it

"Although over time new forms of games of chance have evolved, these principles remain the same. The taxpayer placing a spread bet is not normally carrying on a trade (see BIM22020 for exceptions). They are not taxable on the profits, nor do they receive relief for their losses. The bookmaker organising the spread bet is taxable on their profits."

FXCM UK Spread Betting

1. No re-quotes from dealer
2. Spreads as low as 1 pip
3. Free real-time trading signals and alerts with live account
4. Easy to use platform: fully customizable look and feel with integrated charts

To see spreads on the FXCM spread betting platform, sign up for a free practice account: http://www.fxcm.co.uk/free-trial-account.jsp?CMP=PR-sb If you have any questions, please call one of our currency specialists, who are available 24 hours a day at +0808 234 8789, or e-mail them at [email protected].

that is a good point pipintime. They make more money from the accounts that are opened. So thats a good sign for it being tax free indeffinatly. Until a time where the majority actually profit from it but that would kill the industry anyway.

Pipintime, the revenue already have a tax status for full timers - "professional gamblers". The case was proven a long-time ago with someone who made his income off the horses. I've not heard of any spread-betters being taken up like this, but the principle is the same. Like Pipstar said, it's about being your sole/main income.

Whatever happens, they will stiff you in whichever way they can, of that I think we all agree

so there is now a way they can take tax from your profits if its your sole income? What a joke. I just wouldnt bother telling them and then if they come knoking on your door just say I thought it was gambling and I have just been really lucky and keep on being lucky, what r u going to do lol.

I suppose it depends on how they define main income. I could go to the tax office and ask but that might just red flag me to them.

If they do insist on taxing me then with CGT at a flat 18% now, it would be better to just use a normal broker and pay CGT rather than income tax, wouldn't it?

Tim

There is alot of confusion over this issue, I am a full time trader and investor, (although I have other self employment status in another business also) and I have made very healthy profits both in CFD's and Spread betting through the last 3-4 years. I have spoken to the revenue and to tax accountants and it appears that in almost all cases a professional trader would be able to keep profits tax free, even if you engage in the activity every day. The only circumstances whereby you might be taxed is if you place trades with a spread betting broker in relation to other business interests or if you profit by the actual facilitating of the trades themselves. Here is a post from the Revenues own site, although there are many others if you search. http://www.hmrc.gov.uk/manuals/bimmanual/BIM22017.htm

Fortunately, CFD profits will also now be taxable at the lower flat 18% capital gains rate regardless of income tax banding or total profits made. So for the most part, even though the government is screwing higher earners more and more anyone successful in the markets will find the UK a reasonable place to do business. Personally I'd happily emigrate to Dubai, or any other tax haven to avoid handing over 50% of my earnings. That and over regulation removes any incentive for aspiring entrepreneurs to build great future businesses in the UK, businesses that we need to provide high quality jobs for the future. I only wish the more socialist, high tax liberals would see there will be no jobs for anyone if we don't reward the hard working, the talented and/or those that will take a chance to make a success of their life!

Hi guys,

This may seem as a dumb question, but isn't spread betting riskier than forex trading? I mean, as far as know, it requires more margin and eats up your balance much quicker than orginary forex position. At least that was my experience when I tested SB.

There is no difference as far as risk is concerned. You are trading the same forex pairs with more or less the same spreads and the same leverage.

By the way, more margin doesnt it up your balance, it may even preserve it when you use low leverage. It's losses that eat up your balance