RE: Advise Please9 Jun 2021 16:32
Spread betting and contracts for difference (CFDs) are leveraged-based derivative products for trading on thousands of different financial markets. They enable traders to speculate on a security’s price without needing to own the underlying instrument.
The key differences
Spread betting and trading CFDs share many characteristics but there are some key differences. The main difference is the way they are treated for tax– spread bets are free from capital gains tax in the UK*, while CFDs are not.
CFD trading is not tax free in the UK, while spread betting is
CFD equity trades ask for a commission – spread bets on shares do not
Spread bets have a fixed expiry date. CFDs – excluding futures, binaries and options – do not have an expiry date.
With CFDs there is no need to pay stamp duty, but you do need to pay capital gains tax on profits. Losses can therefore be used to offset taxes elsewhere.
ETX Capital offers spread betting and trading on CFDs across thousands of markets. If you live in the UK, you may find that spread betting is better suited because it is tax free, although some UK-based investors still prefer CFDs.
Spread betting CFD trading
No Capital Gains Tax
but you cannot use losses to offset tax lia