For active Trading US stock is more attractive than the UK Stock. Also considering the stamp duty?

⚖ Active trading
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I understand that in the UK you will need to pay a stamp duty (0.5%) each time you buy a UK stock.

You do not pay this duty for the US/Other stocks. Instead, you will need to pay about 20% for the dividend paid to you. But this dividend tax is irrelevant for many traders. if you buy a growth stock you do not get dividend anyway.

Trading 212 does not attract foreign exchange fee so anytime you sell and buy you get an interbank exchange rate. Of course, it is better if you have a US$ currency account because you have a full control when to use and when not to use. There will be an exchange rate fluctuation. But it does not really matter if you are trading frequently as some day you get £/US lower but on the same day or other day you might get £/US higher so overall it is a quite balance.

Have i missed something here ? Your opinions, comments please.

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“From 28 April, Stamp Duty and SDRTwere no longerlevied on purchases in eligible AIM and High Growth Segment securities.Purchases made by private investors in an eligible security are therefore Stamp Duty / SDRT exempt”

Could someone who knows please elaborate this. Is From 28 April this year or Next year ??

I just checked it on Trading212 Trbsaction. I still pay stamp duty of 0.5% for UK stock. Is that correct ??

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Yeah so the exemption came in six years ago so for AIM stocks the stamp duty fee is nothing. It was done to help encourage investors.

Stocks on main market on LSE will have stamp duty.

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@adindas Just bear in mind the fx changes are usually higher than stamp duty anyway so apple’s and oranges really

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This is not true on Trading 212, since there are no fx charges.

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Changes not charges, I’ve had stocks down over 5% just in fx

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Apologies for misunderstanding. I would say that fx changes average out over time at 0, whereas stamp duty is a 0.5% loss that is gone for good.

It is not attractive to me to move in an out of a UK stock multiple times, losing 0.5% on each time of purchase. Moving in and out of a US stock has less friction.

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Thats fair I suppose but I haven’t had any fx in plus for over 2 months

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Exchange rate £/US$ is changing all the time and it is going in both direction South and North. Sometimes £/US$ higher than average sometimes lower. So, If you are doing trading frequently, you will get both cases. In average it will be balance Keep in mind Trading212 does not have fee for exchange rate.

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@adindas In theory yes but when your “trading” the market you are fairly fixed inside of the current fx wave and pattern ie at the moment the pound has been strong against the dollar for a couple of months but has fluctuated more than 5%, I have bought several stocks inside of this timeframe and none have provided a possible fx gain within this time frame.

So couple this with the quick trades you are looking for and you frequently have fx losses of 1-2-3% or more within the day (currently) making the 0.5% stamp duty look like a government favour.

When the dollar begins to rally again or likewise the pound drops again things will turn the other way round, but at the moment this is what I’m “actually” seeing on a daily basis right now.

So my answer is no currently for active trading the US is not more attractive than the UK, also the UK news is dominating the markets every day especially so on a Monday morning, so certainly a strong argument for active/day/swing trading in the UK right now due to predictable news based volatility

I also think while the “UK new strain” is for some unknown reason dominating the news scene short sellers will be having a field day.

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Hi,
Does anyone know if a non UK resident also living outside of the UK buys stocks on the LSE, is Stamp duty and SDRT still has to be paid?
Thanks a lot

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It applies to all regardless of where you reside. Some stocks are exempt.