If I set up a company to trade through a spread better, will I have to pay tax?

[cb275]

As a retail trader, using a spread bet as an individual, you don't have to pay capital gains. Is it still the same case if I set up a company and trade in the same way?

 

[BeginnerJoe]

You will have to pay corporation tax on profits. I don't see any advantage unless you already have a company with an untaxed cash reserve you can play with. Although spread betting is regarded as gambling as opposed to trading or investing. It must look a bit funny to the tax man that the sole purpose of your company is to go to the casino .

 

[Black Swan]

Which SB firms allow you to open accounts in the name of (or as) limited companies?

 

[shadowninja]

If you're doing that, you might as well trade with a broker. Corp taxes are lower than the taxes that an individual would have to pay, aren't they? Plus you can offset costs and losses against profits. I might be talking ****.

 

[anley]

I don't think any broker will open a corporate account because the tax-free nature of spread betting relates to personal taxation.

 

[Hoggums]

As already stated you will have to pay coporation tax on any profit.

in order to take the money out of the company you will either have to pay yourself a salary or pay dividends - both of which are subject to income tax.

Simply no point in doing it through a company.

 

[BeginnerJoe]

If this kind of thing is allowed and the OP knows how to make money, then it can be advantageous. The profit built up can be kept in the company then dripped out either as dividend or salary at the lower tax rate. That way the OP can have a salary for life. Also the cost of equipment, subscription fees, home office expenses, lunch money can all be set against the profit. For all this to work, the OP has to make enough money to make it worth while. Otherwise the paper shuffling involved in company administration would be too much hassle.

 

[shadowninja]

Otherwise the paper shuffling involved in company administration would be too much hassle.

Very true. I hate corp tax time. I'm too tight-fisted to pay an accountant.

 

[BeginnerJoe]

Very true. I hate corp tax time. I'm too tight-fisted to pay an accountant.

I have an accountant and it's still a major hassle. I think I talk to him once a year.

 

[Black Swan]

I don't think any broker will open a corporate account because the tax-free nature of spread betting relates to personal taxation.

Yep...and you can''t set up a vehicle to trade others' money (as a 'group' SB account) even though it's their money and you're (the vehicle) trading collectively on the group's behalf..

 

[Dannygee112]

You can set up group accounts at sbet companies but they usually top out at 4 members or you POA yourself onto peoples private accounts. But then there is the problem of payment...?

 

[Arek Okrasa]

Hi,

Have you try to set up a joined account and manage other people (friends) funds?
Kind regards,
Arek

Which SB firms allow you to open accounts in the name of (or as) limited companies?

 

[BeginnerJoe]

Hi,

Have you try to set up a joined account and manage other people (friends) funds?
Kind regards,
Arek

Nothing to stop you taking people's cash and pool it for SB; Or you could go legit and set up a hedge fund. I understand hedge funds are not as heavily regulated, and everyone and his dog could get one going in no time.

Even people who succeeded and wrote books of their success didn't want to give investment advise to friend because losing money could lose friends. Are you that assured of your money making skills ?

 

[Arek Okrasa]

You have made good point regarding friends - it is true. However, I will leave the subject for now, as am looking for someone who has the experiance of setting up a joined account.
Anyone?

Nothing to stop you taking people's cash and pool it for SB; Or you could go legit and set up a hedge fund. I understand hedge funds are not as heavily regulated, and everyone and his dog could get one going in no time.

Even people who succeeded and wrote books of their success didn't want to give investment advise to friend because losing money could lose friends. Are you that assured of your money making skills ?

 

[Black Swan]

You can set up group accounts at sbet companies but they usually top out at 4 members or you POA yourself onto peoples private accounts. But then there is the problem of payment...?

HMRC no likey...

 

[anley]

'Friends/family' + 'Managing their money' = Serious problems (most of the time)

Conversely -

'Enemies' + 'Managing their money' = Lots of laughs

 

[Doomberg]

You will have to pay corporation tax on profits. I don't see any advantage unless you already have a company with an untaxed cash reserve you can play with. Although spread betting is regarded as gambling as opposed to trading or investing. It must look a bit funny to the tax man that the sole purpose of your company is to go to the casino .

Lol what are you talking about? They are no different from ECN brokers if used properly

 

[Doomberg]

*Well they are not 'exactly' the same but its not gambling if you are a good trader

 

[DashRiprock]

Doomberg u r such a n00b.

I was a n00b once. Still am.

 

[Doomberg]

Lol i knew someone would pull me up on that, but in reality if the FTSE is for example 6000 pts on Tradestation, and its 6000 points on IG Index, and you want to earn or lose £10 a point, how is SBing gambling but Tradestation isn't?