Dividends and CFD / Spread Betting Adjustments
When trading UK shares or indices using CFDs or spread bets, dividends work differently compared to owning actual shares. You do not receive the dividend itself—because you do not own the underlying asset— but your position is adjusted to reflect the drop in share price on the ex-dividend date.
This page explains how dividend adjustments work for:
- long and short CFD positions
- spread betting positions
- index CFDs (FTSE 100, FTSE 250, S&P 500, etc.)
- special dividends
Why Are Dividend Adjustments Needed?
On the ex-dividend date, a company's share price typically drops by the amount of the dividend. Without adjustments, CFD and spread betting traders would:
- lose money unfairly when long
- gain money unfairly when short
To prevent this, providers make a cash adjustment to your account balance.
How Adjustments Work for Long and Short Positions
Long (Buy) Positions
If you hold a long CFD or spread bet through the ex-dividend date:
You receive a cash credit equal to the dividend.
This offsets the drop in the share price that occurs when the stock goes ex-dividend.
Short (Sell) Positions
If you hold a short CFD or spread bet:
You are debited the dividend amount.
This reflects the economic reality that short sellers owe the dividend to the buyer of the underlying shares.
Worked Example: Individual Share CFD
You hold:
- Long position: 1,500 shares
- Dividend declared: 12p per share
Adjustment = 1,500 × £0.12 = £180 credit
If the position were short:
Adjustment = 1,500 × £0.12 = £180 debit
Index CFDs and Spread Bets (FTSE 100, FTSE 250, S&P 500, etc.)
Indices fall when their constituent companies go ex-dividend. Rather than adjusting the price chart, most UK brokers apply a daily dividend cash adjustment.
For example, if FTSE 100 companies going ex-dividend total 10 points, then:
- Long index CFD → credit
- Short index CFD → debit
This maintains the correct economic exposure.
What About Special Dividends?
Special dividends normally generate larger price drops and larger adjustments. Most CFD providers adjust positions in exactly the same way as standard dividends.
Some brokers may treat very large specials differently - for example, adjusting position size rather than applying a cash credit-but this is uncommon and platform-specific.
Dividend Timing for CFDs vs Actual Shares
Dividends on CFDs and spread bets are credited/debited:
- overnight at the ex-dividend date (often between 23:00 and 01:00 UK time)
Actual shareholders receive dividends weeks later on the official payment date. This is normal - CFD traders are not receiving dividends, but an economic adjustment.
Tax Treatment
The dividend adjustments you receive on CFDs or spread bets:
- are not considered dividend income
- are treated the same as other CFD/spread bet P&L
CFDs
- subject to capital gains tax (CGT)
Spread Bets
- tax-free (no income tax, no CGT)
The adjustment simply increases or decreases your P&L; no dividend tax is ever due.
Interactive: CFD Dividend Adjustment Calculator
Enter the number of shares, dividend per share, and whether the position is long or short.
Summary
Dividend adjustments ensure fairness between long and short CFD or spread betting positions. Long positions receive a credit; short positions are debited. Index CFDs also generate daily dividend adjustments based on constituent companies going ex-dividend.
Understanding these adjustments is essential for active traders, especially those holding positions overnight or trading high-yield shares.