Likelihood of Spread Betting becoming Taxable?


Q. What is the likelihood of spread betting becoming taxable?

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A: In my view, it is very unlikely that spread betting will ever become taxable. The reason is very simple - more money is lost than is won and if the gains were to be taxable the losses would be tax-deductable.

Simon Denham, managing director of Capital Spreads had this to say as an insider -:

When CGT was at 40% nobody really thought that spread betting would become a taxable instrument so with the current level at 18% I feel that it has become even less likely.

The stamp duty angle (0.5%) is also unlikely to be attacked as this would impact CFDs which are a huge revenue earner for the UK (and the government takes a hefty slice in corporation tax).

On another point if spread betting became taxable then the spread betting companies would then dispute the gaming duty levy which is currently at 3% of all client loses. Given that around 80% of clients lose money the government would then lose 24% (80x3%) of definite taxable revenue (as they take it straight from the spread betting companies) against a possible 36% (20*18%) if every single winner declared (of course many clients are foreign) and of course most people have some 6k a year of tax free CGT as well. But they would then lose out on the revenue of the 80% losing clients which could be offset against other CGT liabilities.

Unlikely to happen...is the short answer

 ...Continues here - Do Spread Betting Providers Close Winning Accounts?


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