I've looked elsewhere and ET to check the amount of CGT payable across EU countries and the UK. From what I can see, for a small time investor, UK, Cyprus and Netherlands appear to be the best (barring rich microstates and Switzerland). EU countries in general have little or no CGT thresholds, while UK has 12k+ Pounds per year. There is speculation though that the Conservative Chancellor is planning to review this due to Covid. UK has also got the ISA tax free wrapper, but it cannot be used for holding LEAPs or any derivatives for that matter (or it can be, but no provider is providing this at the moment). Sweden has got something called ISK which is taxed at a flat 1.x%, but it's only available with local providers, and not with brokers like IB? Netherlands has got Box3, which means a flat tax of 1.5% on your entire assets. But this can change if you are considered a trader and you will be considered in a different Box? So if you have a lot of trading activity in an account you are otherwise using for holding LEAPs, would your Box3 status change? Would it help in this case to have say two separate IB accounts, one for speculation and other for investment (and have them considered in different Boxes), or would you not be eligible for Box3 regardless? I have seen that it's possible to have no CGT if you are trading only overseas stocks/options while settled in Cyprus though I wonder about people's real experiences. Belgium (and Switzerland) often gets talked about when talking about 0% CGT, but I have seen nobody say that it's actually practically the case there. I would assume there are more wrinkles in this story (including exit taxes on unrealized gains, and carryover of losses backward/forward) and would appreciate comments from people who have dealt with any of these countries.
You are not being classified as being in one Box or another. You have to pay taxes over everything which falls in each of the three boxes. Usually this means Box 1 for income (e.g. salary, rental income, dividends received, credit interest, etc), plus Box 3 (your wealth).
Taxation of capital gains in Europe is not a trivial thing. You cannot just look at the CGT rate of a county and assume that this will be applicable for a certain profit from your investments. Take Austria, for example. Here there is a CGT of 25/ 27.5 %. Nice, sounds ok and simple. But this tax is not applicable for all income streams from capital investments. For example, if you trade futures or options with a forgein broker, then your profits will be charged with your personal tax rate. Which, depending on your income, can be pretty high, up to 55%. So there is a nice, reasonable CGT in that country, but this is absolutely irrelevant if you are a futures trader. On the flip side, there are also possibilities to reduce the tax rate for your income from trading and other capital gains to very close to 0 %. So as you can see, just 1 country, but already such a broad range of possible tax rates (~0% up to 55 %) for trading related income/ profits. This stuff is not trivial, and without a good (tax) advisor you are lost.
Be aware that financial spreadbetting profits in the UK are exempt from all taxation, they are not counted as either capital gains nor income, regardless of size.
One thing I can tell you is that Bulgaria is a good place for a trader... excellent internet, super low flat tax 10%, nice beaches, sexy hot girls, very low prices,... kind of the Thailand in Europe lol.
Yes, yes. I wish there were more Options to play with though, the max you get is 9 months out on SPX and FTSE (on IG). Is spreadbetting legal in other EU countries? Any other country that doesn't tax spreadbetting?
Following Brexit, Gibraltar no longer is an "EU country". Also, traders may be subject to income tax in Gibraltar - I suggest people who are seriously looking into this seek expert tax advise.
I thought financial spreadbetting is only offered in the UK, because it is a tax avoidance financial mechanism to avoid UK taxation. In the UK, spreadbetting on financial instruments is regulated by the financial industry regulating body, the FCA. In other countries, spreadbetting is defined as a type of gambling. It may be permitted on sports etc. but not on financial instruments. However, Googling suggests its also allowed in the Irish Republic (plus Macau and Hong Kong) but I haven't checked any of these.