Financial traders - instruments and shares: contracts for differences and spread betting
Contracts for differences (CFDs) are defined in CFM50380, and this definition includes financial spread bets. CFDs fall within the definition of derivative contracts for Corporation Tax purposes, so for companies the derivative contracts regime applies in most cases.
It is not usually necessary to identify whether the contract is a spread bet following the case of Morgan Grenfell Ltd v Welwyn Hatfield District Council  1 All ER 1. This case concerned two local authorities which entered into interest rate swaps with one another facilitated by Morgan Grenfell Ltd. The court considered whether or not the interest rate swaps were a gaming or wagering contract but concluded that where such contracts were entered into by parties or institutions involved in the capital market and the making or receiving of loans, the normal inference would be that such contracts were not gaming or wagering but were commercial or financial transactions.
Individuals and others not within the charge to Corporation Tax
For individuals and others not within the charge to Corporation Tax the position is different. In such cases you will need to examine the contract to see if it is a gambling or wagering one. There is guidance on this at BIM22016. The profits or losses from gambling or wagering contracts are outside the scope of Income Tax (see BIM22015). However, this will not apply if the spread bet is used for a commercial purpose such as a hedge where the guidance at BIM56880 should be followed.