Best Thread Capital Spreads

[Uncle]

My Accountant says they are not taxable and therefore they are not declared to the I R, as these are not treated as income but winnings, just like any other kind of winnings on gambling, be it National Lottery or horses, dogs, soccer scores, cricket, etc etc. It is my opinion the Revenue would have difficulty in back taxing such, when all the publicity for Spread Betting clearly says "Tax Free under current legislation". If there were a successful case, I am sure the S B companies would not advertise it as such,as some smart firm of lawyers will be advertising for clients to bring a class action against the S B companies.

John

 

[Roberto]

It is my opinion the Revenue would have difficulty in back taxing such, when all the publicity for Spread Betting clearly says "Tax Free under current legislation".

You could argue more or less the same about horse-racing winnings, though. Nobody can deny that many people have to pay income-tax on those if it's their sole income. It makes them effectively a "sole trader" running a gambling business and they have to declare and pay tax on their profits. There's a list of case-law as long as your arm on this subject. If your accountant also denies that, you might want to think about the services of a new accountant!

However, in my opinion you're entirely right that the IR is going to be reluctant as well as very careful with their first "test-case" on this thorny subject. But eventually there _will_ be one. No reason for anyone to panic at the moment (this is all IMHO, having discussed it with two specialist accountants and two tax inspectors over the last 4 years that I've been trading), but equally no reason to assume that spreadbet profits will always remain tax-free, especially if they're your only income.

 

[kevin546]

Roberto

One aspect of this topic is that you would think many of the pro institutional traders forced into conventional trading would have bemoaned the upsurge in Spreadbetting when they are forced to pay taxes on gains while Spreadbetting go free. Unless they are able to make use of these services to hedge etc.

With the many responses we have had on this topic a way forward for those aspiring to move onto more successful status that probably begin with spreadbetting maybe to look at the best way to prepare for tax should it come into force.

This may involve trading a combination of SB and conventional instruments such as cfd's, futures or shares. The best method to approach the IR and investing the 40% tax that maybe required.

There does seem to be an issue for trading as an income.

Out of interest what did the specialists and tax inspectors say regarding spreadbetting income rather than just winnings from betting.

 

[Roberto]

Roberto

Out of interest what did the specialists and tax inspectors say regarding spreadbetting income rather than just winnings from betting.

Hope I've understood your question correctly, Kevin. All 4 of them were vaguer than I'd have liked, of course, and all 4 of them described it as a "grey area", which it obviously is. But they were certainly talking only about the future potential for tax on "business profits" from spreadbetting (i.e. "overall profits" not just "winnings") ; and they mentioned that doubtless many things could be off-set.

I'm not at all in a panic about suddenly having to pay back-dated income tax on all my spreadbet profits since I got going. But I take on board and agree with your points in the post above; thanks.

(What I have _great_ difficulty accepting is the view, sometimes expressed here with all the force and certainty of fact, that "because there's an at-source levy, there can't also be income tax." This is just plain wrong, as many experts have confirmed to me, and as many professional horse-race backers can attest!).

 

[cc1]

Hypothetical observation. Spreabet companies are taxed on net client losses. What happens if a spreadbet company comes along and acts more like a broker and hedges the trades and doesn't have net client losses but net client wins? I guess the goverment changes the tax rules on spreadbetting.

Of course you don't need to worry about this - traditional brokers clients lose money just as fast as spreadbet ones I believe

 

[Roberto]

Hypothetical observation. Spreabet companies are taxed on net client losses. What happens if a spreadbet company comes along and acts more like a broker and hedges the trades ...

I believe that's exactly what CapitalSpreads do.

Sorry; I don't know anything about how Spreadbet companies are taxed. Maybe others can answer.

 

[cc1]

Roberto,
lol - yes I wasn't going to quite spell it out as you have. What concerns me is that I know one other spreadbet company which hedges and acts in same way as a broker as well as capital and I know another cfd provider may offer similar in the next few months in order to generate more business.

Whilst this gives us more choice over spreadbet, if it continues that way then eventually there won't be a market for cfd's for the private individual as it will all be spreadbet. Now on the one hand you could argue that as the IR would get no revenue from cfd winnings at all they would respond to this by taxing spreadbet. On the other hand you could argue that as overall traders lose IR are making tax on the spreadbet companies which they wouldn't have otherwise had received so this is good for them - ie they are indirectly taxing people for losing money.

I wouldn't put it past them though to tax anyone that won overall but still taxed the spreadbet companies as their revenue from the cfd traders drops off.

 

[CityTrader]

Hypothetical observation. Spreabet companies are taxed on net client losses.

The spreadbetting comapnies paying betting levy based on their turnover t- hey are NOT taxed on "net client losses"

 

[Roberto]

The spreadbetting comapnies paying betting levy based on their turnover t- hey are NOT taxed on "net client losses"

I see ... yes; that sounds much more plausible.

 

[gullible]

Uncle and his accountant are right. Nobody from horse racing winnings should be taxed even if that is the only thing they do 24/7.
This fact is well established.

gullible

 

[Roberto]

Nobody from horse racing winnings should be taxed

I agree with you.

But unfortunately the law says otherwise (and there are now many cases, all of them eventually determined in favour of the Inland Revenue and against the taxpayer.)

If you are a professional gambler (i.e. that's your sole "real income") then you have to pay income tax. Any solicitor or accountant who deals with gaming will confirm this very promptly, and so will the Inland Revenue.

There's a whole body of case-law. This really ought not to be a contentious point at all - sorry you can't agree.

 

[Uncle]

I agree with you.

But unfortunately the law says otherwise (and there are now many cases, all of them eventually determined in favour of the Inland Revenue and against the taxpayer.)

If you are a professional gambler (i.e. that's your sole "real income") then you have to pay income tax. Any solicitor or accountant who deals with gaming will confirm this very promptly, and so will the Inland Revenue.

There's a whole body of case-law. This really ought not to be a contentious point at all - sorry you can't agree.

Then surely it is not beyond the wit of anyone on this Board to make sure they have another interest, and thereby Spread Betting would not be their sole source of income, even if the other source is meagre!!!! Come on you guys.............I suggest your looking for problems that dont exist (at present anyway)

John

 

[capitalspreads]

In response to all of the above.

Talking about tax issues is not really what this site content was meant for.

But...there are one or two factual errors in the contents above ... CS pays Betting Duty / Levy on net client losses... not on turnover as stated by city trader...... so if clients win we pay no Betting Tax.

We do pay a turnover fee to the FSA (you just knew they would be in there somewhere !)

Of course we still pay company taxes / PAYE etc etc etc etc ad nauseam

After all that we then blow the entire company net profits on a big mac and fries (small size) . And the government employs another ten 'Outreach support coordinators' to monitor the impact of Meusli consumption on Alaskan fish farmers.

Although my information may be out of date I do not think that there is a single instance of the IR actually taxing anybody on SB income. Theoretically of course they could do so in extreme circumstances but the effort of proving SB betting as the sole source of income is probably not worth it. (famous last words)

Simon

 

[Orion]

Back to Capital Spreads, the SB company.......

It's now autumn, the time when you anticipated providing the facility of "If Done" orders on your trading platform. When do you expect this to occur?

 

[tradesmart]

Simon......."And the government employs another ten 'Outreach support coordinators' to monitor the impact of Meusli consumption on Alaskan fish farmers."

Yeh, but that's only the ones that spreadbet surely.........?!

 

[kevin546]

Capitalspreads

You have probably answered this before how does your company deal with a winning client. It would seem that the suggestion against some of your competitors is that they do not play the spread as suggested but actually lose when the client wins. As a result they start to make trading difficult for the client and in some cases close the account. Do you hedge positions or take some other action.
Personally if I knew I had a customer with a high win rate then I would support the deal and make money from it rather than try and turn the client away.

I thought Spreadbetting companies operated differently from bookmakers but if the above is true then it would seem they are exactly the same and do exactly what bookmakers do when they find a winner, close them down.

 

[darrenf]

Capital Spreads / Simon,

Quick question please. I'm using your demo only account at present. I like it am will probably open a live account soon to complement my other SB account.

I can see how you change the stop loss on an open trade if you want a stop that is closer than the computer generated one. What I cannot see, however, is how I set a stop at my chosen level on a limit buy or sell order that is not yet executed.

Is this possible on the live account, as I cannot work out how to do it on the demo account? Or do you have to wait for the pending limit order to be filled before you can bring in the stop.

If you cannot do this then it looks like the only problem I would find with the otherwise excellent platform.

Thanks!

What you are asking about here is "if done" orders. ie you attach a stop (and/or limit) to a pending order which is waiting to be executed at your desired price. The if done element is only entered in to the market once your entry order has been executed.

These are also known as contingent orders.

CS have been developing the addition of this facility for a good few months now and originally, it was to be introduced during the summer.

As orion asked a few posts back, any update on this Capital Spreads/ Simon?

Cheers

Darren

 

[capitalspreads]

kevin

we have never closed an account whether winners or losers

if we identify winners we do indeed back them.... I think that if we treated any of our clients badly or deliberately delayed fills etc.. you would have heard about it by now on this very thread ..or elsewhere on the various chat sites.

orion / broadside / darren

yes the order module has been delayed ..... hands up.... it has suffered from delays in other projects.

it is the next but one upgrade but I cannot give an exact date...sorry we are aware that this is important for some of our clients.. but as i have stated we are quite happy with client phoning in contingent orders ( we are quite nice to talk to ) .

Simon

 

[tradesmart]

if we identify winners

surely it should be "when" we identify winners.......

it must happen all the time........?.......

well, sometimes........?!..

:|

 

[milt]

Ahh...so CS will do contingent orders over the phone??.
I've been looking for someone to do this for a while: Cantors say they will do it but only for sizeable bets,as (they say)a dealer would have to manually monitor & open the position,from what I could gather.
Simon,do your normal minimums apply for contingent orders & do they require to be manually opened like Cantor's?
I have just got the brochure from Man Financial spread betting,and they will be offering contingent orders online.