Trading without paying stamp duty


#1

When buying individual UK shares there is a 0.5% stamp duty. I’m looking for a way to trade shares on short time scales for fun.

Is there any way to trade shares without having to pay stamp duty? I have seen that there is no stamp duty for trading Alternative Investment Market (AIM) shares. Are these stocks available on Freetrade or will they be?

When US stocks are added, will they be tradable with no charges (stamp duty, fees etc.)?


(Vladislav Kozub) #2

If it is an LSE-listed company, there is no way around it. But the ETFs (even UK-based ones) do not charge stamp duty.

They are not available yet, more details from @JamieP on that:


Absolutely right, you will not have any additional duties for the US stocks except the FX rate + 0.5%.

See detaailed calculations on what it means here.


(Giridhar Tammana) #3

Another way is to use CFDs(correct me if I’m wrong) , Freetrade is not going to support that.
I don’t know details on CFDs. Brokers might charge interest may be other charges.
They could be useful sometimes, like when you want to be invested but have to take profit for tax reasons etc.


(Vladislav Kozub) #4

I think you are referring to the leveraged trading where brokers charge interest. For example, you invest £1 and the broker “lends” you another £9 to multiply your gains. If your asset increases in price - great, you have x10 gains. If your asset decreases by 10%, you will either have to “top up” to keep your invested funds above loss value or the broker sells everything off and you lose 100%. The broker will get their £9 back, probably will charge you the transaction fee and will take benefit of the interest you paid on that £9.

Would it not be easier to offset the gains by selling the assets you have made an unrealised loss on?