Spread Betting Tax Free Profits or Not

If there is a case where someone spreadbetting became liable to tax then it would open the floodgates for offsetting losses against tax. This would hit the taxman more than leaving things as they are now in my view.
 
Trader333 said:
If there is a case where someone spreadbetting became liable to tax then it would open the floodgates for offsetting losses against tax. This would hit the taxman more than leaving things as they are now in my view.
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Agreed.

The only thing to ensure when spread betting is that the company you choose is making a profit...this means that the majority of SB'ers are losers and that the govt is receiving a tax take from the SB co's profits.
 
 
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A subject very close to my heart.
I approach problems from a different angle, if you read my posts regularly you'll understand what I mean.
Having a logical mind I understand you cannot prove a negative (thats how religions have stayed the course of time) so the only way to get an answer is to come up with proof that someone HAS been taxed for spreadbetting.
A simple google search comes up with no stories of any such person in the UK.

On one of the above websites listed http://www.financial-spread-betting.com/Tax-free.html a person claims "The revenue already have a tax status for full timers referring them as 'professional gamblers'. The case was proven a long-time ago with someone who made his income off the horses. " but no proof is given or case cited. It appears any fool can write what they like on the internet and not feel the need to back up their claims with real world hindrances such as 'proof'.

So this is an open invitation for anyone who has been taxed as a spread bettor to post here, I am sure we are all eager to hear from you.
 
postman said:
A subject very close to my heart.
I approach problems from a different angle, if you read my posts regularly you'll understand what I mean.
Having a logical mind I understand you cannot prove a negative (thats how religions have stayed the course of time) so the only way to get an answer is to come up with proof that someone HAS been taxed for spreadbetting.
A simple google search comes up with no stories of any such person in the UK.

On one of the above websites listed http://www.financial-spread-betting.com/Tax-free.html a person claims "The revenue already have a tax status for full timers referring them as 'professional gamblers'. The case was proven a long-time ago with someone who made his income off the horses. " but no proof is given or case cited. It appears any fool can write what they like on the internet and not feel the need to back up their claims with real world hindrances such as 'proof'.

So this is an open invitation for anyone who has been taxed as a spread bettor to post here, I am sure we are all eager to hear from you.
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OK - me

I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler".

In my own particular case - I had been on the Inland revenue's hit list for over 20 years - ie once you are caught on one incident involved with any business activity - you will then be normally "looked at" every 5 -7 years.

Tax is like trading - its not black or white.

For the vast majority of all spread betters - there is no problem - you will not be taxed - simply because in the UK it's classified as gambling.

However - having say 30 punts a year - losing on say 12 and winning a net $30k on the other 18 - is looked upon entirely different to taking 10 + trades a day with a 70%+ success rate and making $300k per year (n)

Just don't get in trouble with the tax man - and then you should be OK ;)


Regards

F
 
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Forexmospherian said:
OK - me

I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler".

In my own particular case - I had been on the Inland revenue's hit list for over 20 years - ie once you are caught on one incident involved with any business activity - you will then be normally "looked at" every 5 -7 years.

Tax is like trading - its not black or white.

For the vast majority of all spread betters - there is no problem - you will not be taxed - simply because in the UK it's classified as gambling.

However - having say 30 punts a year - losing on say 12 and winning a net $30k on the other 18 - is looked upon entirely different to taking 10 + trades a day with a 70%+ success rate and making $300k per year (n)

Just don't get in trouble with the tax man - and then you should be OK ;)


Regards

F
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Prove it, otherwise I don't believe a word of it !
 
postman said:
A subject very close to my heart.
I approach problems from a different angle, if you read my posts regularly you'll understand what I mean.
Having a logical mind I understand you cannot prove a negative (thats how religions have stayed the course of time) so the only way to get an answer is to come up with proof that someone HAS been taxed for spreadbetting.
A simple google search comes up with no stories of any such person in the UK.

On one of the above websites listed http://www.financial-spread-betting.com/Tax-free.html a person claims "The revenue already have a tax status for full timers referring them as 'professional gamblers'. The case was proven a long-time ago with someone who made his income off the horses. " but no proof is given or case cited. It appears any fool can write what they like on the internet and not feel the need to back up their claims with real world hindrances such as 'proof'.

So this is an open invitation for anyone who has been taxed as a spread bettor to post here, I am sure we are all eager to hear from you.
Click to expand...

Doesn't matter if you are a "professional gambler" or not - spreadbetting is not taxable. The only snag is if your "professional gambling" is regarded as part of a wider business activity - eg: maybe selling trading tips/systems/coaching etc - when spreadbetting profits you make might be wrapped up in the wider business income.

So, fxmo is either being illegally taxed, or he has some wider business interest involved :).
 
Forexmospherian said:
OK - me

I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler"...

However - having say 30 punts a year - losing on say 12 and winning a net $30k on the other 18 - is looked upon entirely different to taking 10 + trades a day with a 70%+ success rate and making $300k per year (n)

F
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Thanks for your reply F interesting stuff.
You say "I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler" ... well this is an opportunity to find out, what a bummer if you are:(.

"Having 30 punts a year is different to 10+ trades a day"... why? Its still the same thing
Is 9 trades a day Ok what about 7 or 5 or 2:eek: what is the rule? There is no rule. Gambling is gambling is gambling, its tax free to the punter because the SB pays the tax. Heres what UK case law has to say about "the professional gambler" http://www.hmrc.gov.uk/manuals/bimmanual/bim22017.htm "There is no tax on a habit."

I take it the Inland Revenue looked at what you do and said you must pay us 'x' and you paid. :eek: Why? I think they tried it on with you and you caved in. If they took you to court there would be case law in the UK and we wouldnt be having this discussion it WOULD be black and white. Just my opinion please tell me if I'm wrong.

So if you pay tax on your winnings do you offset your gambling losses against your tax bill? :party: Imagine the uproar if that were possible.

I am not privy to your private tax affairs but there are 'certain types' of spread betting that have been deemed taxable, here are 3.
1. Ones in which the outcome is > 1. http://www.hmrc.gov.uk/manuals/bimmanual/BIM22018.htm
This is why betting companies pay tax, because they offer odds to punters with <1 return, you add up all the odds in a horse race and bet on every horse and you will lose money. If you structure a spread bet so there is no chance of a loss thats not gambling(its a dead cert.) and you may be asked to pay tax.
2. Its a commercial transaction wrapped up to look like a spread bet in order to avoid tax. http://www.hmrc.gov.uk/manuals/bimmanual/BIM56900.htm.
3. If you have a 'Bot' which takes advantage of the emotional exuberance of punters (technically arbitrage). https://www.accountancylive.com/tax-and-gambling-man (under 'professional punters') again a dead cert, no risk.

Given the examples above I concede it isnt black and white, but if your spread betting on FTSE, Dow, Forex 100 times a day, it is! http://www.hmrc.gov.uk/manuals/cgmanual/cg56105.htm


If you make £300k a year and you keep some of it in a bank, you will accrue interest which IS taxable. If you have a second home which you rent out or sell that is taxable. So a person such as yourself would have to pay tax anyway.

The Inland Revenue are nice people :innocent: but they do like to chance their arm a little in order to extract money from citizens. (For the benefit of the country of course, lovely people love 'em all :love:).

To sum up, if you pay tax on £300k PA you might want to think about getting a decent accountant, because they sure as hell wont charge you £100k+ to cut your tax bill. You can buy me a drink later. :cheers:
 
postman said:
Thanks for your reply F interesting stuff.
You say "I am absolutely sure I am not the only FX spreadbetter between 2006 and 2012 who's been taxed - under the definition of a "professional gambler" ... well this is an opportunity to find out, what a bummer if you are:(.

"Having 30 punts a year is different to 10+ trades a day"... why? Its still the same thing
Is 9 trades a day Ok what about 7 or 5 or 2:eek: what is the rule? There is no rule. Gambling is gambling is gambling, its tax free to the punter because the SB pays the tax. Heres what UK case law has to say about "the professional gambler" http://www.hmrc.gov.uk/manuals/bimmanual/bim22017.htm "There is no tax on a habit."

I take it the Inland Revenue looked at what you do and said you must pay us 'x' and you paid. :eek: Why? I think they tried it on with you and you caved in. If they took you to court there would be case law in the UK and we wouldnt be having this discussion it WOULD be black and white. Just my opinion please tell me if I'm wrong.

So if you pay tax on your winnings do you offset your gambling losses against your tax bill? :party: Imagine the uproar if that were possible.

I am not privy to your private tax affairs but there are 'certain types' of spread betting that have been deemed taxable, here are 3.
1. Ones in which the outcome is > 1. http://www.hmrc.gov.uk/manuals/bimmanual/BIM22018.htm
This is why betting companies pay tax, because they offer odds to punters with <1 return, you add up all the odds in a horse race and bet on every horse and you will lose money. If you structure a spread bet so there is no chance of a loss thats not gambling(its a dead cert.) and you may be asked to pay tax.
2. Its a commercial transaction wrapped up to look like a spread bet in order to avoid tax. http://www.hmrc.gov.uk/manuals/bimmanual/BIM56900.htm.
3. If you have a 'Bot' which takes advantage of the emotional exuberance of punters (technically arbitrage). https://www.accountancylive.com/tax-and-gambling-man (under 'professional punters') again a dead cert, no risk.

Given the examples above I concede it isnt black and white, but if your spread betting on FTSE, Dow, Forex 100 times a day, it is! http://www.hmrc.gov.uk/manuals/cgmanual/cg56105.htm


If you make £300k a year and you keep some of it in a bank, you will accrue interest which IS taxable. If you have a second home which you rent out or sell that is taxable. So a person such as yourself would have to pay tax anyway.

The Inland Revenue are nice people :innocent: but they do like to chance their arm a little in order to extract money from citizens. (For the benefit of the country of course, lovely people love 'em all :love:).

To sum up, if you pay tax on £300k PA you might want to think about getting a decent accountant, because they sure as hell wont charge you £100k+ to cut your tax bill. You can buy me a drink later. :cheers:
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Hi postman

Well one of Grant Thornton tax specialist's charged me just over £2k for a few hrs work including attending a meeting at a tax office in central Birmingham with also my own accountant.

I could write a book on what I have been through with regards to tax avoidance rather than tax evasion and in my own particular case it is very complex involving other businesses and monies invested overseas.

Yes - I wish it had been £300+K per annum purely from spreadbetting - but I quoted in dollars - so not even £180k.

I would prefer to not wash my dirty linen in public - but a couple of things I found interesting at the time was

1. I was asked to hold a bible and swear on oath with regards to what my defence was etc

2. I was also asked for a copy of my house insurance policy - At the time - I did not realise how cute these tax officials are - but they wanted to check how much cover I had for cash at my home in my safe ;-))

I will also say over the 30 years in business I have paid a lot of tax - and believe that is fair that you should pay a proportion of what you earn.

The spreadbetting part was just the "icing on the cake" as far as they were concerned and like anything in life - you end up negotiating - and that's another skill I am very good at :)

With regards to counter violent's comment - please just carry on not believing anything at all I say :rolleyes:

Regards


F
 
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Think I read on another thread on this forum where by a member was approached by HMRC asking what he was doing for a living now as he had not been working for a couple of years I think and when he told them spread betting they hit him with a tax demand which he paid.

'Hoping' the HMRC doesn't come knocking does not seem like a wise strategery if you are successful at spread betting. Given they can hit you with up to a 100% fine plus interest on any demand.

Tax inspectors are very cute, it's their job. I was told of someone being inspected where their petrol receipts and the cars MPG was checked agaisnt mileage on previous MOT readings.
 
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neil324 said:
Think I read on another thread on this forum where by a member was approached by HMRC asking what he was doing for a living now as he had not been working for a couple of years I think and when he told them spread betting they hit him with a tax demand which he paid.
....
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Hi Neil I'll get my apology in first if I may. I suffer from a mild form of autism spectrum disorder known as Asperger Syndrome, this means I lack cognitive empathy and so some people say this comes across as rudeness.:whistling

Your statement about someone somewhere saying something which may or may not have anything to do with the subject we are discussing is as much use as a chocolate teapot. Did you check out what this mystical chap said or are you just regurgitating someone elses drivel? I once read on t'internet Freddie Star ate someones hampster, there is a B52 bomber on the moon and Kim Kardashian really meant it when she said "I do". Its possible that none of those things are true!


Did anyone read any of the previous posts from people who actually bothered to put some effort into this discussion such as Liquid validity?
http://www.trade2win.com/boards/spr...ing-full-time-sole-source-income-traders.html
"I am a full time spread-bet trader. I have been making good money doing this for nearly four years.
I trade a £40K account split between two SB firms. I pay no tax and have a letter from the IR stating that I do not have to pay tax on my winnings even though it is my sole source of income. (I have it framed on my office wall)"

No offense. :innocent:
 
postman said:
Hi Neil I'll get my apology in first if I may. I suffer from a mild form of autism spectrum disorder known as Asperger Syndrome, this means I lack cognitive empathy and so some people say this comes across as rudeness.:whistling

Your statement about someone somewhere saying something which may or may not have anything to do with the subject we are discussing is as much use as a chocolate teapot. Did you check out what this mystical chap said or are you just regurgitating someone elses drivel? I once read on t'internet Freddie Star ate someones hampster, there is a B52 bomber on the moon and Kim Kardashian really meant it when she said "I do". Its possible that none of those things are true!


Did anyone read any of the previous posts from people who actually bothered to put some effort into this discussion such as Liquid validity?
http://www.trade2win.com/boards/spr...ing-full-time-sole-source-income-traders.html
"I am a full time spread-bet trader. I have been making good money doing this for nearly four years.
I trade a £40K account split between two SB firms. I pay no tax and have a letter from the IR stating that I do not have to pay tax on my winnings even though it is my sole source of income. (I have it framed on my office wall)"

No offense. :innocent:
Click to expand...

My youngest also has this and can be quite challenging.

I so wish I had it, then I could be even more rude than I am presently :)
 
mike. said:
There's quite a good insight in the link below.

http://www.financial-spread-betting.com/Tax-free.html
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'Quite good insight' - Really? Did you read it?

FIRST question and answer ....
Q: So is Spread Betting really tax-free?
A: The simple answer is yes. .... If you do not have any other regular taxable income other than gambling you will probably be classified as a professional gambler (your trade) and may loose your BIM22017 exemption...."

The knob head that wrote that (didnt even bother to attach his name to it) obviously didnt bother to go and read the rule he quoted.
http://www.hmrc.gov.uk/manuals/bimmanual/bim22017.htm
"...This shows that having expertise or being systematic (‘studying form’) is not enough to create a trade of being a ‘professional gambler’.
Some ‘professional gamblers’ do carry on a trade, for example, where they receive appearance money for appearing on television programmes. They are providing a service to a customer (the television production company) for reward. Whether their gambling winnings are proceeds of that trade would depend upon the facts."

If he'd read the ruling he'd quoted he would have seen that being a spread bettor does not qualify you as a "Professional gambler".

Some other knob head quotes the term "professional gambler" and even remembered a small detail about horse racing and then completely gets the wrong end of the stick!
"The revenue already have a tax status for full timers referring them as 'professional gamblers'. The case was proven a long-time ago with someone who made his income off the horses."
Yes the case was proven 'a long time ago' and it was ruled HE DIDN'T HAVE TO PAY TAX !

Please see my previous post for explanations on rudeness etc... time for some more of my medication. :rolleyes:
 
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postman said:
Hi Neil I'll get my apology in first if I may. I suffer from a mild form of autism spectrum disorder known as Asperger Syndrome, this means I lack cognitive empathy and so some people say this comes across as rudeness.:whistling

Your statement about someone somewhere saying something which may or may not have anything to do with the subject we are discussing is as much use as a chocolate teapot. Did you check out what this mystical chap said or are you just regurgitating someone elses drivel? I once read on t'internet Freddie Star ate someones hampster, there is a B52 bomber on the moon and Kim Kardashian really meant it when she said "I do". Its possible that none of those things are true!


Did anyone read any of the previous posts from people who actually bothered to put some effort into this discussion such as Liquid validity?
http://www.trade2win.com/boards/spr...ing-full-time-sole-source-income-traders.html
"I am a full time spread-bet trader. I have been making good money doing this for nearly four years.
I trade a £40K account split between two SB firms. I pay no tax and have a letter from the IR stating that I do not have to pay tax on my winnings even though it is my sole source of income. (I have it framed on my office wall)"

No offense. :innocent:
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No offense taken.

I was just thinking out loud. Dangerous as you pointed out:cool:. But on my reading the various forums I have only seen two accounts of people saying they have been taxed SB'ing. Not many is it. Although strangely this forum is the only one to discuss SB'ing to any degree. So my post was an attempt to add weight to the arguement that it is not ever taxed.

As you say what people say on the internet does not matter either way to you as an individual. As the post here states

'conclusive peace of mind that my profits are tax free'

http://www.trade2win.com/boards/spr...ing-full-time-sole-source-income-traders.html

You will only get that from HMRC directly through personal contact.

And if you raking up year after year profits then clarification might be a wise/sensible move. After all I believe some countries do not tax trading.
 
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