Although the budget did not raise Capital Gains Tax as much as was feared, it was still quite a large rise, and it can still affect people with large shareholdings. This has made the spread betting look even more attractive due to its tax free status.

Unlike shares, futures or contracts for difference, spread betting gains are not taxed as capital gains. This is because spread betting is seen as form of gambling as it is done in a closed network and the person who takes both sides of the bet is the same person. A contract for difference has a buyer and seller by contrast, whereas everything in a spread bet goes through the betting exchange.

It would be mad for the government to make gambling losses claimable for tax, so in that spirit the government makes gambling winnings untaxed.

This means that profits on spread bets are tax free. This means that some people can benefit a great deal on this.

Firstly the rise in capital gains tax particularly affected the higher paid. Those paying the 40% or 50% tax band saw their CGT rate go from 18% to 28%, a 56% increase in the rate. This is significant. Although losses on Contracts for difference, shares and options can be used to lower the capital gain, and the threshold of £10,100 remains, spread betting is totally tax free on the gains.

Spread betting has the same result as share options do, but due to the status of the activity as “betting” then it has remained tax free, something the budget has not changed.