How do financing costs compare between spread betting and CFDs?
Verdict
- At Pepperstone, our top pick for UK traders, spread bets and CFDs both pay an overnight fee on positions held past 10 pm UK time; its pages in our data publish no separate rates for the two, so check each symbol's financing in the platform.
- What clearly differs is everything around the financing: spread bets carry no commission and, by Pepperstone's wording, no capital gains tax or stamp duty, while CFDs pay CGT (losses can be offset) and Razor commission.
- For a profitable position held for weeks, the tax difference can be worth more than the financing itself, though whether CGT applies depends on your circumstances.
- Capital.com, our second choice, also offers spread betting and CFDs to UK clients; its overnight rates are not in our data.
Hold a leveraged position overnight and you pay financing, whether it is a spread bet or a CFD. The question is whether the product changes the bill. Here is what Pepperstone publishes, where the real differences lie, and how to compare the two on the same trade.
Same overnight charge point, different wrappers
Pepperstone charges an overnight fee on positions held past 10 pm UK time, on its spread betting account and on its Standard and Razor CFD accounts alike. Its pages in our data do not publish a financing formula that differs between the two, so we cannot say one is cheaper to hold on financing alone. We can say where the bills differ: spread bets carry no commission and, in Pepperstone's words, are exempt from capital gains tax and stamp duty; CFDs carry no stamp duty but profits are liable to CGT, with losses available to offset. We pick Pepperstone because you can hold both under one FCA-regulated company and compare them directly.
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Spread bet vs CFD at Pepperstone: the full holding cost
Financing is one line among several; the others are where the products separate.
| Cost | Spread bet | CFD Standard | CFD Razor |
|---|---|---|---|
| Overnight fee past 10 pm UK | Yes | Yes | Yes |
| Commission on FX | None | None (1-point mark-up in the spread) | $3.50 per side on MT5, from £2.25 in GBP |
| Commission on share CFDs | None | 0.10% per side UK; $0.02 per share US | Same as Standard |
| EUR/USD minimum spread (UK) | 0.5 points | 1.0 | 0.0 |
| Capital gains tax | Exempt, per Pepperstone | Liable; losses can be offset | Liable; losses can be offset |
| Stamp duty | None | None | None |
| How you size it | Pounds per point | Lots or shares | Lots or shares |
How to compare financing on the same trade
- Open the same market in both accounts, for example UK100 as a spread bet and as a CFD.
- Read the long and short overnight rates in each symbol's specification in the platform.
- Size both to the same exposure, then note the overnight charge each one shows after a night.
- Add commission and spread, then weigh the tax treatment for the holding period you expect.
Worked example: when tax outweighs financing
Say a UK100 position gains £3,000 over six weeks and pays £180 in overnight fees either way; the £180 is an illustration, not a Pepperstone rate. As a spread bet you keep £2,820 and, on Pepperstone's wording, owe no CGT on it. As a CFD the gain is liable to capital gains tax, subject to your annual allowance and other gains. Whether tax is actually due depends on your circumstances, but the example shows why financing is seldom the line that decides between the two.
When a CFD still makes sense
- You want losses to count against other capital gains; Pepperstone notes CFD losses can be offset.
- You trade FX in lots on raw spreads: Razor averages 0.1 pips on EUR/USD.
- You prefer MetaTrader or TradingView on a CFD account: in the UK both come with Razor.
- Capital.com, our second choice, also offers both products and adds guaranteed stop-losses; its financing rates are not in our data.
Sources
Product terms as Pepperstone and Capital.com publish them.
When is the overnight fee charged on a Pepperstone spread bet?
On positions still open past 10 pm UK time, once for each night the position is held.
Is spread betting always tax-free?
Pepperstone says spread betting profits are exempt from capital gains tax in the UK, but that tax treatment depends on your circumstances and the law can change. Take your own tax advice if the amounts matter.
Can I hold a spread betting and a CFD account at the same time?
Yes. Pepperstone says you can hold several account types at once, including spread betting, Standard and Razor.
Leveraged products such as CFDs and spread bets carry a high risk of losing money rapidly. Pepperstone reports that 73.6% of its UK retail investor accounts lose money on these products. Tax treatment depends on your individual circumstances and can change. This is not investment or tax advice.