Question
I've noticed that I don't pay Stamp duty on some of my Investment Trust purchases, such as
Genesis Emerging markets
Henderson Far East Income
but I do pay 0.5% stamp duty on other IT purchases made at the same time. They all appear to be LSE listed and denominated in GBP and conventional ITs so I can't see why they're treated differently. Could you explain the reason behind this?Answer
A quick check of the HMRC rules suggests that stamp duty on share purchases via a UK stock exchange doesn't apply if the shares are in a foreign company who doesn't keep a register of shareholders in the UK. This is the rule that permits exchange traded funds (ETFs) to be exempt from stamp duty.
As the Genesis IT is domiciled in Guernsey and the Henderson IT in Jersey, then assuming they don't maintain a shareholder register in the UK they'd benefit from the same rules - hence the reason you didn't have to pay stamp duty when buying them.
I've noticed that I don't pay Stamp duty on some of my Investment Trust purchases, such as
Genesis Emerging markets
Henderson Far East Income
but I do pay 0.5% stamp duty on other IT purchases made at the same time. They all appear to be LSE listed and denominated in GBP and conventional ITs so I can't see why they're treated differently. Could you explain the reason behind this?Answer
A quick check of the HMRC rules suggests that stamp duty on share purchases via a UK stock exchange doesn't apply if the shares are in a foreign company who doesn't keep a register of shareholders in the UK. This is the rule that permits exchange traded funds (ETFs) to be exempt from stamp duty.
As the Genesis IT is domiciled in Guernsey and the Henderson IT in Jersey, then assuming they don't maintain a shareholder register in the UK they'd benefit from the same rules - hence the reason you didn't have to pay stamp duty when buying them.
Read this Q and A at http://www.candidmoney.com/questions/question530.aspx
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