Spread betting

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11. Practical advantages - tax

Profits from spread bets are not taxed either as capital gains or as income.

The reason is that under current law no betting profits are taxed, and the reason for that is that if the Revenue taxed profits they'd also have to let people offset betting losses! As more people lose money betting than make it, the Revenue's coffers fill quicker by having no tax on betting gains/losses than by having them.

Of course, the absence of CGT is only relevant to people whose annual gains are likely to exceed the annual exemption, but that threshold is within sight for many investors.

There is betting duty paid on spread bets, but this is almost always paid for by the indexation companies out of their profits, so you don't need to worry about it.

1. What is spread betting? 2. A brief history 3. Spreads on individual equities 4. Spreads on an index 5. Performance spreads 6. Other financial spreads 7. Practical advantages - leverage 8. Practical advantages - going short 9. Practical advantages - hedging 10. Practical advantages - volatile markets 11. Practical advantages - tax 12. Dynamics - think short term 13. Dynamics - the size of the spread 14. Dynamics - upside and downside 15. Dynamics - length of bet 16. Strategy - bet only what you can afford 17. Strategy - cutting losses 18. Strategy - stop losses and limited risk bets 19. Strategy - taking profits 20. Strategy - arbitrage 21. Opening an account 22. Placing a bet and managing your account 23. Regulation 24. Some more tips 25. Conclusion

• Financial Spread Betting
• The Beginner's Guide to Financial Spread Betting