THE persistent refusal of Chancellor Gordon Brown to make any commitment to reform Stamp Duty Reserve Tax on share transactions – at 0.5 per cent the highest in Europe – has played a large part in the remarkable growth in popularity of Contracts for Difference (CFDs) and spread betting.
Since, unlike conventional instruments, CFDs and spread bets do not confer ownership of the underlying asset – traders buy or sell the price movement in the underlying equity without ever taking delivery of it – neither is subject to stamp duty. And because spread betting falls within the gaming laws, it is also exempt from Capital Gains Tax.
The other key appeal of spread betting is that, as a margin product, it enables traders to gear up their investments. And because, as a margin product, traders could potentially lose a multiple of their initial stake, spread betting is recommended for use only by professionals, day traders and experienced investors.
But while there are risks attached to spread betting, there are various tools available – such as guaranteed stop losses – that can help manage that risk by, for example, inputting to the...
To view and download this full PLR article, you must be logged in. Registration is completely free. Once you create your account, you will be able to browse, search & downlod from our PLR articles database of over "1,57,897+" on 1,000's of niches and 200+ categories without paying a penny. Click here to signup...
