Excerpt from: Pro FX Commentary Lite
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| June 28, 2006 | | Financial spread betting is the UK alternative to spot forex trading | Financial spread betting is one of the most tax-efficient ways of trading the world's financial markets. Due to the structure of the financial spread betting, all gains are currently completely free of capital gains tax. (although tax laws can change). However, this does mean that any losses cannot be offset against future gains, but it is potentially a very small price to pay for this exciting trading derivative. Under current law, individuals in the U.K. have a government capital gains tax allowance of around £8,000 per year (2006/07), but once you have exceeded this, the tax exempt status of the spread bet makes it an invaluable tool in maximizing your profits. Since your transactions through GFT Global Markets U.K. are considered bets, your profits are exempt from capital gains tax.
Because spread bets are a derivative (not physically owned like a share), there is currently no stamp duty to pay. If you were to trade a position size each day of £25,000 through a traditional stock broker, you would have to pay the government £27,500 in stamp duty for the entirety of the year. | Topic Tags: derivatives trading, financial trading, spot forex, spread betting, United Kingdom | |
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