CFD's & CGT

CFD's & CGT

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New client, he trades on the UK Stock Market using CFD's (which are "Contracts for Difference"). Basically, he gambles on making a profit on the daily movement in the price of various SE shares, or on the daily movement of the Footsie 100 Index itself.  He carried out 366 such transactions in 2009/10, via the internet, making an overall profit of just over £11k.

Does such profit represent capital gains, or is this a trade (in the old Schedule D sense of the word)?

Apparently, this type of activity is becoming quite common amongst "Stock Exchange gamblers" who are prepared to take risks, so how is it treated for tax purposes?

Readers opinion would be most helpful.

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By IanBrewster
18th Oct 2010 15:45

CGT would apply

The CGT regime for shares normally applies to profits on CFDs

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