Forex & CFD Trading Tax in the UK (2026)
How you're taxed on trading in the UK depends entirely on how you trade. Spread betting is generally tax-free; CFDs and shares are subject to Capital Gains Tax. Here's a plain-English breakdown so you can choose the most tax-efficient route — and stay on the right side of HMRC.
How each product is taxed
| Product | Tax treatment | Notes |
|---|---|---|
| Spread betting | No Capital Gains Tax, no stamp duty | Treated as a bet — profits are tax-free for most retail traders; losses are not deductible. |
| CFDs | Capital Gains Tax on net gains | Above the annual CGT allowance. Losses can be offset against other capital gains. |
| Spot forex (own account) | CGT (or income if trading is your profession) | Most retail FX via CFDs/spread bets; direct spot FX is rarer for retail. |
| Shares (investing) | CGT on gains + 0.5% stamp duty on purchase | Dividends taxed separately under the dividend allowance. |
Spread betting — the tax-free route
For most UK retail traders, spread betting profits are exempt from Capital Gains Tax and stamp duty because HMRC treats them as gambling winnings rather than investment gains. That makes spread betting the most tax-efficient way to trade forex, indices and commodities for many UK residents. The catch: you also can't deduct losses. If you're consistently profitable, this is usually the better structure. See our best UK spread betting brokers and the full spread betting vs CFD comparison.
CFDs — taxable but flexible
CFD profits are subject to Capital Gains Tax on net gains above your annual allowance. Unlike spread betting, you can offset CFD losses against other capital gains and carry unused losses forward if you report them. This flexibility makes CFDs useful for traders who expect losing periods, or who hedge a share portfolio. Keep every contract note — FCA-regulated brokers like Pepperstone and FxPro provide annual tax statements.
Reporting to HMRC
- Spread betting: generally nothing to report for CGT.
- CFDs/shares: if net gains exceed the annual CGT allowance (or proceeds exceed the reporting threshold), report via Self Assessment.
- Keep records of every trade, deposit and withdrawal — your broker's annual statement is the starting point.
- If trading is your main source of income, HMRC may treat profits as income (Income Tax + National Insurance) rather than CGT — get advice.
Frequently asked questions
Do you pay tax on forex trading in the UK?
It depends how you trade. Spread betting profits are exempt from Capital Gains Tax and stamp duty for most UK retail traders. CFD and share trading profits are subject to Capital Gains Tax above your annual allowance, though losses can be offset. If trading is your main profession, HMRC may treat profits as income instead. Always confirm your position with HMRC or an accountant.
Is spread betting really tax-free in the UK?
For most UK retail traders, yes — HMRC classifies financial spread betting as a bet rather than an investment, so gains fall outside Capital Gains Tax and stamp duty. The trade-off is that you cannot deduct spread betting losses. This treatment could change and depends on your personal circumstances.
How much is Capital Gains Tax on CFD profits?
CFD gains above your annual CGT allowance are taxed at the CGT rate that applies to your income band (a basic-rate or higher-rate band applies). You only pay on net gains after offsetting losses. Keep records of every trade — brokers provide annual statements to help you report.
Can I offset trading losses against tax?
CFD and share losses can be offset against other capital gains, reducing your CGT bill, and unused losses can often be carried forward if reported to HMRC. Spread betting losses cannot be offset because the winnings are not taxed.
Do I need to tell HMRC about my trading?
If your CFD or share gains exceed the annual CGT allowance, or your total proceeds exceed the reporting threshold, you must report via Self Assessment. Spread betting profits generally do not need to be declared for CGT. When in doubt, register for Self Assessment and keep full records.
Related UK guides
- Best UK spread betting brokers — tax-free trading
- Spread betting vs CFDs
- Best forex brokers UK 2026
- FCA-regulated brokers explained
Informational content only, not tax or investment advice. Tax treatment depends on individual circumstances and may change. Confirm with HMRC or a qualified adviser.
