Difference between Spread betting and CFDs

[0FXTrader0]

‘To be taxable, the spread betting wins must come not merely from an opportunity presented by a trade, they must arise from the carrying on of that trade. Whether or not a particular spread bet is taxable will depend on the terms of the contract and the economic substance of what is done.’

So if your carrying out your trading activities daily not ad-hoc and are trading size i.e economic substance you will become liable to a tax inquiry.

Along with the government website moneyadvice saying that if you live of profits made these facts should mean you go and speak with an advisor on tax issues who help you out.

 

[MasterOfCoin]

So if your carrying out your trading activities daily not ad-hoc and are trading size i.e economic substance you will become liable to a tax inquiry.

Nope.

You still don't get it.

That does NOT constitute the carrying on of a trade, no matter if you do it al day every day, year in, year out.

Now if you were offering your trading activities to the benefit of others, or carrying them out on someone else's behalf, then you are carrying out a service and thus can be constituted as carrying on a trade.

These are entirely different things.

Red Lobsters are not necessarily dead Lobsters.

 

[ffsear]

No individual pays tax on spread betting profits. If you think otherwise then please provide an actual example.

 

[0FXTrader0]

What is magnificent is the amount of T2Wer's who seem to gather all the information links form HMRC to prove a point yet none have been to consult even there local accountant on tax matters.

 

[MasterOfCoin]

What is magnificent is the amount of T2Wer's who seem to gather all the information links form HMRC to prove a point yet none have been to consult even there local accountant on tax matters.

That comment is off-topic, presumptive and, frankly, irrelevant.

For all you know, the posters could BE accountants.

Surely you are not suggesting that proving independent evidence to support a point of view discredits that point of view?
Well, maybe in your world, perhaps.

😁

 

[0FXTrader0]

Confirmation bias

 

[MasterOfCoin]

Now, let me think really hard.

Should I trust more what HMRC say in black and white plain text on their website and case law, or should I put my faith in random yewtube videos from vested interests touting for business.

Hmmmmmm, let me think.

Nhahhh, screw yewtube, I'll go with the information provided BY the Tax Authority.

 

[0FXTrader0]

You don't have to structure losses

 

[FXX]

No individual pays tax on spread betting profits. If you think otherwise then please provide an actual example.

refer to hmrc.. nobody is saying it is not tax free. What people are overlooking is that it is not tax free in every case.

 

[MasterOfCoin]

refer to hmrc.. nobody is saying it is not tax free. What people are overlooking is that it is not tax free in every case.

Yep. It's just tax free in every case of private retail investors spreadbetting with their own money on their own behalf.

 

[0FXTrader0]

If you were trading at institutional size 10M clips that is economic substance so you tax free claim is out the window

 

[MasterOfCoin]

And off into cloud cuckoo land we fly ...

🦇🦅 🦤

 

[FXX]

example of carrying on the trade

if you have a website selling signals or teaching people how to trade and charging for it. Then you are deemed to be carrying on the trade and it then becomes a tax.

 

[FXX]

you also have to declare the income you make even if it is tax free, else there will be an investigation and you will have to prove your money source.

Professional Gambler Fends Off £290,000 Income Tax Demand - Hubbard Pegman Whitney

HM Revenue and Customs (HMRC) are always on the lookout for unexplained cash earnings which have not been declared for tax. However, in one case, a former professional gambler was...

www.hpwsolicitors.co.uk

HMRC launched an investigation after noticing large amounts of cash being paid into the man’s 10 bank accounts. On the basis that there was no reasonable explanation for those receipts, HMRC asserted that he had, over a period of about seven years, failed to declare his income from a taxable trade. Income Tax demands totalling £290,928 were raised against him, together with late payment penalties of £132,193.

 

[MasterOfCoin]

example of carrying on the trade

if you have a website selling signals or teaching people how to trade and charging for it. Then you are deemed to be carrying on the trade and it then becomes a tax.

Yes, we said this.

That's 'providing a service to others' which is a trade.

Spreadbetting as a private retail investor on your own behalf is NOT taxable.

Kindly stop suggesting it is by providing inapplicable examples of other activities which are.

😁

 

[FXX]

Yes, we said this.

That's 'providing a service to others' which is a trade.

Spreadbetting as a private retail investor on your own behalf is NOT taxable.

Kindly stop suggesting it is by providing inapplicable examples of other activities which are.

😁

oh god help me. When did I say it is taxable outside of carrying on the trade? perhaps if you learned to read it might help instead of asserting I am suggesting something is when I didn't.

 

[MasterOfCoin]

you also have to declare the income you make even if it is tax free, else there will be an investigation and you will have to prove your money source.

Professional Gambler Fends Off £290,000 Income Tax Demand - Hubbard Pegman Whitney

HM Revenue and Customs (HMRC) are always on the lookout for unexplained cash earnings which have not been declared for tax. However, in one case, a former professional gambler was...

www.hpwsolicitors.co.uk

HMRC launched an investigation after noticing large amounts of cash being paid into the man’s 10 bank accounts. On the basis that there was no reasonable explanation for those receipts, HMRC asserted that he had, over a period of about seven years, failed to declare his income from a taxable trade. Income Tax demands totalling £290,928 were raised against him, together with late payment penalties of £132,193.

Result: Zero Tax Paid.

''In challenging those bills before the FTT, the man argued that the entirety of his income throughout the relevant period represented gambling winnings. He said that he was a highly skilled poker player who frequently won handsomely and that he had a sophisticated system for beating the bookies when placing wagers on the outcomes of football matches.

He had not been employed or self-employed in any capacity during the period and it was only after he forsook his gambling lifestyle that he removed his cash winnings from his safe and began to pay them regularly into his bank accounts. The consistency of those payments was explained by the limited capacity of banks to accept £20 notes into automated machines.

In ruling on the case, the FTT noted that elements of the man’s account gave rise to justified suspicion. Successful gamblers tend to be the exception and few people have the sangfroid to risk such large sums of money. However, his evidence, which was backed up by several other witnesses, was consistent and had remained unshaken under cross-examination.

He had given a detailed and lucid explanation of the intricate system he used to win on football matches, which involved careful research and calculation rather than hunches or guesses. He had also demonstrated deep experience and knowledge of high-stakes poker. His account was accepted in full and the FTT found that, apart from any bank interest, he had no taxable source of income during the period. The Income Tax demands and penalties were ruled invalid and overturned.''

Gambler kept all his winning and paid no tax.

Very kind of you, though, to post evidence further supporting what many of us have consistently said all along.

😁

 

[ffsear]

refer to hmrc.. nobody is saying it is not tax free. What people are overlooking is that it is not tax free in every case.

So name a case where someone has been taxed on spread betting profits, please?

On the flip side, this would make spread betting losses tax-deductable no? Again, looking for evidence.

 

[MasterOfCoin]

oh god help me. When did I say it is taxable outside of carrying on the trade? perhaps if you learned to read it might help instead of asserting I am suggesting something is when I didn't.

Actually, you said just that here:

spread betting can be taxed as income if it is your main source of income.

Perhaps you should learn to write what you actually mean to say before questioning other's reading skills???

 

[timsk]

Hi OFXT,
Do you not think there's a clue in the name: Spread Betting? (Note emphasis.)

If trading profits derived from spread betting are taxable, then all profits derived from every other form of betting - aka gambling - would also be taxable. That they're not tells you all you need to know. If HMRC demands tax from profitable spread bettors, then they'll have to do the same from all those that bet, say, on the gee gees. And if they do that, then everyone that makes a loss (i.e. 90%+ of all gamblers) will be etitled to offset this year's losses against next year's hoped for gains. Now, if you can provide any evidence to support that this is happening anywhere in the gambling industry - just one solitary example will do - then I'll gladly retract my comments and bow to your superior knowledge and insight!

Tim.