Will the various MiFID regulated binary option brokers start issuing capital gains statements to their traders for tax filing purposes A recent check of HM Revenue amp Customs shows no results in their FAQ section regarding binary options. The HMRC in the UK has a two tier capital gains tax of 18 amp 28 on capital gains after exceptions. View more on HMRC capital gains.In the United States, the IRS discusses gambling tax at length and has specific examples for tax on gambling winnings which get reported by the casino on a form W-2G, see here. Binary option brokers will not be issuing Form W-2G to traders because binary option brokers do not consider themselves casinos.The capital gains tax is reported on a form 1040D. On the form is a portion for short term and long term capital gains. Options held for less than a year go on the short term capital gains form. The question is, will the IRS consider binary options traded on a non US regulated brokers platform to be considered an asset and reports as short term capital gainsAs of October 2014, binary options fall under the jurisdiction of gambling in the United Kingdom. Starting January 2015, they hope to have the regulatory oversight transferred to the Financial Conduct Authority (FCA) and make binary options like other stock market trading.Copyright 2013 - 2015 Binary Options Exchange - Provides Binary Options Traders With The Latest Accurate Information About Regulated Binary Options Brokers.Regulated Binary Options Licensed Brokers Binary Option Scams Trading Signals About ContactAs opposed to traditional trading where you would have to predict the future price of stocks, with binary options you just need to guess the direction of the price change on the underlying asset. Another important difference is in the expiration dates and times. In the more traditional trading you are looking at extended expiration dates (weeks or months). With binary options the expiration dates are more immediate. Were talking about days, hours and sometimes even minutes (although I wouldnt recommend putting down a trade on an expiration time within range of minutes).This is also crucial, the fully regulated betting exchanges like NADEX (North American Derivatives Exchange) which is regulated by the CFTC, you can trade binary options freely, and they allow you to trade in and out of them, as opposed to the usual cypress-based binary options brokers that will lock you into a trade until the expiry time. So, at a quick comparison level, we can see that today we have a lot more flexibility in the expiration dates. This is particularly important if we take into account the emotional traders that base their trading strategy more on instinct and less on numerical insight and fiscal analysis.Generally speaking the binary options trading industry is an unregulated one. NADEX and igmarkets are an exception to the rule, and they dont focus just on binary options. They have a huge range of financial instruments like forex, CFDs, DMA trading, bonds, and so on. If you really want a good binary options broker we recommend taking a look at the table at the binaryoptionsreports home page and sorting according to preference.Current Market Regulatory RequisitesThe major regulatory advantage digital options trading sites have over other sites offering more traditional types of trading, lays in the fact that they can be certified by financial auditory and regulatory bodies, as well as gaming regulatory and licensing authorities (under fixed-odds betting). This is why is recently saw a binary options trading site with the Malta LGA logo. This seemed ridiculous to me at the time, but now I understand the business and legal considerations a bit more.Binary Options Fixed-odds BettingFixed odds mean that the outcome is pre-determined. Since binary options can have only two fixed and final results, the risk factors and revenue are known based on the amount of money deposited and traded. For this reason certain gambling regulatory authorities like the LGA in Malta or Alderney in the UK consider this type of financial betting. This has immense significance on the taxation structure which de-facto means that less tax is being paid (in most of the gambling jurisdictions).Binary Options Financial Regulatory SnapshotMost binary options brokers will operate under some type of Cyprus-based license like the CYSEC. There are tens of forex companies that operate under their license since Cypress is a part of the EU on one hand, but on the other hand has a very comfortable taxation structure for offshore companies wanting to set up businesses in their jurisdiction. Others may operate under the FSA in the UK, the AFSL in Australia, or the MAS in Singapore however Cypress is by far the leading jurisdiction for binary options regulation.It is worth mentioning that, in some countries such as Israel and Turkey where the regulations are not as strict as in the EU or the US, no license is required by law for operation. This is a bit of a wild-west situation but surprisingly the market keeps itself in check. Binary options have enjoyed a recent surge in popularity.
