Spread Betting and Tax in the UK

By mosesbet · Filed Under Spread Betting Comments Off on Spread Betting and Tax in the UK 

Spread Betting and Tax

At the moment in the UK spread betting profits are tax-free.  This however, is dependant on your proving that you have other main sources of income.  Short and sweet, spread betting is classified by the government as another form of gambling which cannot be taxed (just like casino and poker).

Types of Tax in UK

There are two main types of tax that conventional traders have to pay attention to: capital gains tax and stamp duty.  Capital gains tax is charged on the difference or profit between what you paid for an investment and what you sold it for (whether that’s sales of stocks, shares, or bonds).  Stamp duty is a 0.5% charge on all shares bought in a market as soon as you purchase any.  Spread betting markets are exempt from stamp duty since there are no 3rd parties involved in the transaction.

It is thought that a large majority of the 30% annual growth of spread betting is from city traders motivated by the tax-free policy of spread betting. This enables them to enjoy far more profits using their market knowledge and expertise – potentially up to 50%+ ROI compared to regular day-to-day trading!

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