With large rises in capital gains taxes threatened in the emergency budget, the spread betting industry looks set to benefit.
If the rumours about a leap in CGT from 18% to 40% in the emergency budget on 22nd June turn out to be true, then investors holding stocks and shares could be hit hard when realising their gains.
Many shareholders are long term investors and include a large number of low paid workers who have diligently saved for their futures in company share save schemes. It’s not just the wealthy “fat cats” that could get hit badly by large increases in CGT.
Wins from betting are not liable for CGT and stamp duty , however the clue is in the name. Taking out short term spread bets on whether a stock, or index, will rise or fall, is just that – betting.
So the new coalition government looks set to punish long term investors and reward short term gamblers.
That really doesn’t seem sensible. Let’s hope that MP’s such as John Redwood can convince the Chancellor (and the Lib Dems) to instigate some form of taper relief which reduces CGT liability for long term stock holdings, particularly if those holdings are in your own business or your employer.