Spread betting vs CFD trading

Spread betting vs CFD: the differences in one table

Both products track a price without giving you the asset, and the FCA counts financial spread bets as CFDs for its retail restrictions. The rows below are where they part. Tax rows describe an individual who is not trading as a business.

Stake per point vs contract size

On GBP/USD, where a point is 0.0001, a spread bet of £1 per point moves by £1 for every point. A CFD of 10,000 GBP/USD units moves by $1 per point, because the pair is quoted in dollars; the dollar result is converted into your account currency. Pepperstone’s UK guide describes spread bets as quoted in pounds per point and CFDs as better suited to trading in the base currency of the underlying asset.

At 1.2650, £1 per point on GBP/USD is £12,650 of exposure and a 10,000-unit CFD is £10,000. The FCA cap of 1:30 on major pairs sets the margin on each at one thirtieth: £421.67 and £333.33.

Commission and overnight financing

IG and CMC Markets say their UK spread bet and CFD accounts charge no commission on forex; the cost is in the spread (published terms, checked 19 Oct 2026). Raw-spread CFD accounts are the exception: the spread is narrower and a commission is charged per lot, GBP 2.25 per lot per side on Pepperstone Razor. Pepperstone’s UK guide applies overnight financing to both products when a position stays open past the trading day.

Ten positions a day pay the spread ten times; one position held for 30 nights pays financing 30 times. The first trader’s cost is mostly spread, the second’s mostly financing. Compare both costs on the same market at the same broker before choosing the product.

Spread betting vs CFD tax in the UK

CFDs: HMRC’s Capital Gains Manual (CG56100) says retail CFDs are financial futures charged, in almost every case, under the capital gains regime. Net gains above the £3,000 allowance for 2026 to 2027 are taxed at 18% within the basic rate band and 24% above it, and losses are deducted from gains of the same year and carried forward under the GOV.UK rules.

Spread bets: section 51 of the Taxation of Chargeable Gains Act 1992 says winnings from betting are not chargeable gains, and HMRC’s BIM56900 puts profits or losses from gambling contracts outside Income Tax for individuals, except where the bet is used for a commercial purpose such as a hedge. BIM22020 makes spread betting wins taxable when they arise from a trade. This is general information, not tax advice; your position depends on your circumstances, so check HMRC guidance or ask a tax adviser.

The tax answer flips with the result: in a year of net losses, a CFD loss can reduce tax on other gains, now or later, while a spread betting loss cannot be relied on to do so.

Spread betting outside the UK

Every spread betting account in our data sits with a broker’s FCA-authorised UK company: CMC Markets, IG, Pepperstone, ThinkMarkets and Vantage. IG’s UK site says it is not directed at residents of the United States, Belgium or any country outside the UK, and that tax law may differ elsewhere. Outside the UK the same brands sell CFDs through their other companies, so traders there compare CFD brokers instead.

9 brokers in our data have an FCA company for UK residents but list no spread betting account; at those, a UK trader can only use CFDs.