Please note that this is intended to be a simple guide and is not a substitute for professional advice. In addition, tax law may change over time so check what may have changed. Please take professional advice before making decisions of any importance with regard to tax. It also considers only UK tax law.
Capital gains tax
Spread bets are exempt from capital gains tax in the UK. They are legally bets. While this may seem to be always good, it does mean that losses made on spread bets cannot be used to set off capital gains made elsewhere. This may be important when spread bets are part of a wider portfolio, and it is a good reason to prefer CFDs for hedging.
Income tax
There are very limited circumstances in which the gain on a spread bet may be regarded as income from trade, and taxed as such. For this to happen the spread bet needs to be entered into as part of the trade, for example to hedge a risk taken in the course of trade. Unlike investment in securities or commodities, engaging in spread betting as one's main occupation is not sufficient to make the gains taxable as income.
Corporate taxes
A financial spread bet made by a company would usually be taxed in the same way as a contract for difference, or any other derivative contract. They do not, therefore, have the same advantages for companies that they do for individuals.
Stamp duty
Stamp duty (to be precise, stamp duty reserve tax) is not charged on spread beting transactions.