Frequently asked
questions
Tax rules, legality, costs and getting started — straight answers about UK spread betting.
Yes. Spread betting is fully legal and regulated by the Financial Conduct Authority (FCA). All brokers listed on BetTheSpread hold active FCA authorisation. It is only available to UK and Ireland residents — it is not available in the US or most other countries.
Under current HMRC rules, spread betting profits are exempt from Capital Gains Tax (CGT) and Stamp Duty for most UK individuals. Because spread bets are classified as gambling, winnings are not taxable. However, losses cannot be offset against other taxable gains. If spread betting is your primary income source or conducted as a business, you should take professional tax advice. Tax rules can change — this reflects the position for the 2026/27 tax year, reviewed July 2026.
Legally, spread betting is classified as gambling in the UK, which is why profits are tax-free. In practice it functions like leveraged trading — you are speculating on price movements of real financial markets (shares, indices, forex, commodities). Between 51-82% of retail accounts lose money, so the risk is real regardless of the legal classification.
Most UK spread betting platforms have no minimum deposit or require between £100–£500 to open an account. You can start with stakes as low as £0.10 per point on some platforms. However, because spread betting uses leverage, you should only trade with money you can afford to lose.
The spread is the difference between the buy (ask) and sell (bid) price quoted by your broker. It is the primary cost of placing a spread bet. For example, if the FTSE 100 is quoted at 10800–10801, the spread is 1 point. Tighter spreads mean lower trading costs.
Leverage allows you to control a larger position with a smaller deposit (margin). For example, 10:1 leverage means a £1,000 margin controls a £10,000 position. While leverage amplifies profits, it equally amplifies losses — you can lose your entire deposit on a single trade. FCA rules cap retail leverage at 30:1 for major forex, 20:1 for indices, 10:1 for commodities, and 5:1 for shares.
For retail clients, no — FCA rules require all UK-regulated brokers to provide negative balance protection, meaning your account cannot go below zero. You can lose your entire deposit, but not more than it. For additional protection, some brokers offer guaranteed stop-loss orders (GSLOs) that cap your loss on individual trades at a set level, usually for a small premium.
UK spread betting platforms typically offer thousands of markets including: UK and international shares, stock indices (FTSE 100, S&P 500, DAX), forex pairs, commodities (gold, oil, natural gas), bonds and interest rates. Cryptocurrency is the exception: the FCA has banned crypto derivatives — including crypto spread bets — for UK retail clients since January 2021, so no FCA-regulated firm may offer them to you. The exact range otherwise varies by broker.
Beginners tend to benefit from platforms with strong educational resources, demo accounts, and user-friendly interfaces. In our scoring, IG, CMC Markets, and City Index consistently rank well for new traders. All three offer free demo accounts so you can practise without risking real money. See our Best for Beginners category for full rankings.
Most spread betting brokers do not charge commission — the spread is the only cost for most markets. However, some brokers charge commission on share spread bets (typically on DMA/direct market access orders). You may also pay overnight funding charges if you hold positions beyond market close.
Key factors to consider: FCA regulation (essential), spread costs on the markets you trade, platform quality and tools, available markets, minimum deposit requirements, educational resources, and customer support. Our methodology scores brokers across six weighted categories to help you compare objectively.
A stop-loss is an instruction to automatically close your position if the market moves against you by a specified amount. It limits your potential loss on a trade. A guaranteed stop-loss order (GSLO) ensures execution at your exact stop price even in volatile markets, usually for a small premium. Standard stop-losses can experience slippage in fast-moving markets.