Stamp duty in UK

Are there any players in the UK market that don't have to pay the .5% stamp duty?

 

you can trade equities via CFD to avoid the fee. CFD is a swap where we agree to pay each other the return of the equity (depending on if you want to go long or short). it's basically trading equities synthetically.

 

Thanks for the reply I know about CFD's I was just wondering if any players brokers for example are exempt from the .5% tax?

 

I have looked into this... although UK stamp duty is exempted from CFD trading, the face value commission structures imposed by CFD trading companies mitigate a large proportion of any savings on stamp duty e.g. 0.2% in and out takes care of most of the 0.5% saved, so the only significant reason to use CFDs is to short European stocks...

As for UK spreadbetting, this is exempted from both stamp duties and from capital gains taxation... but spreadbetting firms do not allow American investors to participate, for regulatory reasons...

 

Subsidiaries of the brokerages are probably exempt...

 

I would imagine they are, I was told by UK broker Cazenove when it was still Cazenove and not JP Morgan that no one was exempt but I am sceptical.

 

I always regarded Cazenove's as part of the aristocracy... is your dad a Sir or a Lord, by any chance?

 

Not a client had a friend who worked there.

Lordie Lord

 

Found this

CFDs allow investors to profit on the movement of a share price without actually owning the physical stock. Similar to other derivative instruments such as futures contracts, two parties enter into an agreement to settle at the close of their contract the difference between the opening and closing price of a company’s share price.

Firms that offer CFDs are able to hedge their exposure to the contracts by physically buying the underlying stock, and by doing so enjoy a tax concession that means they do not have to pay stamp duty.

CFDs have rapidly grown in popularity in recent years, and this has been reflected in government revenues from stamp duty, which have traditionally been one of the largest contributors to the Treasury’s coffers.

I thought someone somewhere did not pay!

 

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