Spread betting tax implictions

[johnnywalker]

Hi,

I am new to this community and spread betting! 

What I am trying to figure out is;

• There are no CGT implications for spread betting UK stocks 
• But, you will need to declare your income (fingers crossed) to HMRC should you make a profit in the current tax year

US Stocks

• What are the implications for spread betting US stocks in terms of tax?

Thanks

[KoketsoIG]

16 hours ago, johnnywalker said:

Hi,

I am new to this community and spread betting! 

What I am trying to figure out is;

• There are no CGT implications for spread betting UK stocks 
• But, you will need to declare your income (fingers crossed) to HMRC should you make a profit in the current tax year

US Stocks

• What are the implications for spread betting US stocks in terms of tax?

Thanks

Dear @johnnywalker,

Welcome to the IG community and thank you for your post.

Please note spread betting accounts are tax-free in such that they do not attract capital gains tax or stamp duty in the UK (Tax laws are subject to change and depend on individual circumstances. Tax laws may differ in a jurisdiction other than the UK).

With regards to US stocks, the US Internal Revenue Service ('IRS') has issued regulations under Section 871(m) of the US tax code to ensure that non-US holders of US equity derivatives - including spread betting and CFDs - are taxed on dividend adjustments in the same way as non-US holders of the real US dividends.

IG has an obligation under this US tax regulation to obtain documentation (W8BEN form) from clients who hold CFDs and spread betting instruments that reference US equities.

Thanks,

KoketsoIG

 

[johnnywalker]

1 hour ago, KoketsoIG said:

Dear @johnnywalker,

Welcome to the IG community and thank you for your post.

Please note spread betting accounts are tax-free in such that they do not attract capital gains tax or stamp duty in the UK (Tax laws are subject to change and depend on individual circumstances. Tax laws may differ in a jurisdiction other than the UK).

With regards to US stocks, the US Internal Revenue Service ('IRS') has issued regulations under Section 871(m) of the US tax code to ensure that non-US holders of US equity derivatives - including spread betting and CFDs - are taxed on dividend adjustments in the same way as non-US holders of the real US dividends.

IG has an obligation under this US tax regulation to obtain documentation (W8BEN form) from clients who hold CFDs and spread betting instruments that reference US equities.

Thanks,

KoketsoIG

 

Great, thanks for your answer @KoketsoIG,

So IG would automatically hold back 15% dividend withholding tax on the dividend ex-date? I would then need to complete a W8BEN form to submit to IG on an annual basis?

[KoketsoIG]

No problem @johnnywalker,

Yes, this will be automatically adjusted. 

A W8BEN form is submitted on an annual basis, if you trade US stocks without a valid W8BEN form, a charge will be debited to your account.

Thanks,

KoketsoIG

[johnnywalker]

Thank you for you help, @KoketsoIG