A: You do not really have to live in the United Kingdom to spread bet, all you need is to create a spread betting account with a FSA regulated provider. However, be warned that not all providers may accept international spread betting applications - for instance CMC Markets and Cantor won't allow it - they will ask you to open a CFD trading account instead. Other providers like Capital Spreads accept international applications but gains may not be (offically, at least 
) tax-free as in the UK and Ireland. You should check the laws of your country if you are in doubt and this is your responsibility as the tax status of spread betting may vary depending on your residence. Generally spread betting/cfds also available in Canada, Australia and EU countries and you will need to check the regulations in your own country regarding tax.
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A: In the United Kingdom spread betting is regarded as gambling (although it is still regulated by the Financial Services Authority), therefore is not subject to tax. Despite being regulated by the FSA in the UK, the US considers spread betting to be internet gambling which is forbidden. It is also worth noting that all income in the USA is taxable (including gambling winnings). This is perhaps the reason why option trading is so much more popular in the United States as traders see the leverage possible from options as highly desirable in the absence of alternatives.
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