Contracts for difference are a futures contract and so they are taxed in quite a different way from many other investments. Despite having a similar terminology and providers that spread betting has they are treated in quite a different way.
In the UK the government will not tax gains or losses made with gambling as gamblers tend to lose money on the whole and this would overall lower the tax take. (Cars don’t count for capital gains for a similar reason in that they almost always depreciate over time.) Spread betting is classed as gambling as it is done with the equivalent of a bookmaker. This means that there are no capital gains charged on a spread bet.
A Contract for Difference is classed as an investment contracts and not gambles so although the effect is almost the same as a spread bet, the tax treatment is quite different. Capital Gains Tax is charged at 18% of all capital gains made, usually when the assets are sold for cash. There is an exemption (currently £10,200 – although this goes up every year) which can lower the gains charged to tax. It is possible to “transfer” this exemption between husbands and wives by transferring the property as a “no gain/no loss” transaction.
If there are losses made within the year then these can count towards capital gains in the year and lower the gain that will be taxed. If there is an overall loss in the year this can either be carried forward and used against future gains or it can, with certain restrictions, be used against income made within the year.