Stamp duty is payable on the majority of stocks in the FTSE 100 or FTSE 250.

You pay stamp duty when you buy shares listed on the FTSE market, and it is charged at 0.5% of the total value of the stock (excluding any broker fees, etc.) you are buying. This means any profit you make on the stock will already be reduced by the amount you pay as stamp duty. If you incur a loss, the stamp duty will make it larger.

For example, buying 1,000 shares of a particular company at a price of £2.50 each will cost more because you will be paying £2,500 (£2.50 x 1,000) for the stock, plus £12.50 in stamp duty (£2,500 x 0.5%), pushing the overall cost to £2,512.50. If you have to pay any broker’s fees, the final amount will be even higher. Not paying stamp duty can increase your total profit and reduce your expenses.

Not all UK shares or shares bought in the UK incur stamp duty.

The good news is that some stocks listed on the UK market do not incur stamp duty. For example, since 28 April 2014, shares bought in an AIM-listed company are exempt from stamp duty. The AIM market comprises smaller companies categorized as “growing companies.”

List of UK shares without stamp duty

These are some of the companies listed on the London Stock Exchange that are exempt from stamp duty:

• Glencore (Ticker: GLEN)
• B&M European Value Retail SA (Ticker: BME)
• IWG PLC (Ticker: IWG)
• Lancashire Holdings (Ticker: LRE)
• Hiscox Ltd (Ticker: HSX)
• Phoenix Group Holdings (Ticker: PHNX)
• Experian plc (Ticker: EXPN)
• International Consolidated Airlines Group (Ticker: IAG)
• 3i Infrastructure PLC (Ticker: 3IN)
• Playtech PLC (Ticker: PTEC)
• BHP Group ((Ticker: BHP)

Why are some stocks exempt from stamp duty?

Stamp duty is only payable if the company whose shares you are buying is incorporated or based in the UK. Essentially, a foreign company is exempt from stamp duty because it does not maintain its shareholder register in the UK.

How do I know if a company is exempt from stamp duty?

If you are paying stamp duty on a particular stock, the amount will typically be displayed at the time of purchase.

How to avoid stamp duty on shares?

A little research online can reveal many shares exempt from UK stamp duty. For example, shares listed on the UK AIM market or foreign exchanges like the US or Europe are not subject to stamp duty.

Is there stamp duty on selling shares?

No, stamp duty on UK shares is only payable when you buy them.

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Disclaimer: This information is provided for informational purposes only and should not be considered financial advice. Readers are encouraged to seek advice from qualified financial professionals or advisors regarding their specific investment decisions and circumstances.