First time buying shares - help

littlerussell

Hi all -

I'm looking into investing about £2k into shares, having never done this before. Would like to invest a good proportion into a particular company - substantial growth against market trends, tipped on one review site as 100% (of 10 reviewers) "buy" and 30% "outperform". It is a Spanish company on the brink of expanding across Europe. I am aware of the risks of falling share prices, etc. and know that any investment is a gamble.

Problem is, I have never invested beyond having a savings account before, and don't know where to start. My own research tells me that:

I find an online share dealing company whose terms I am happy with, set up an account, add funds, buy shares. Company holds on my behalf. First query - in the event of such a broker going into administration, do I still own the shares or is there a risk here? Who are the big players I should be looking at?

I assume that if I receive a dividend, I will pay my usual tax (40%) on it. When I come to sell the shares, is there any tax (assuming that my sale is below CGT threshold of 10k approx)? Are there any tax implications in owning shares in a company listed in Spain?

How much should I be looking at paying for the time of an IFA who might be able to talk me through some of this?

Lokolo

An IFA isn't really going to talk you through it, no point going to one.

Now you say this is a Spanish company.... are they actually listed in Spainish market or are they also on UK market such as AIM?

Lokolo

Another couple of points

1) Making your decision based on a few "reviews" is a bad idea. It could be the same person for all you know.

2) Buying in foreign markets opens up yourself to currency risk.

All this for first time share trader, I would stay away, buy some UK shares in FTSE first, just so you get used to what trading is all about.

littlerussell

Thanks - hadn't considered currency risk.

By reviews, I meant the consensus published on Reuters.

The company is listed on London Stock Exchange website, but under "European Trade Reporting".

bigfreddiel

littlerussell wrote: »

Thanks - hadn't considered currency risk.

By reviews, I meant the consensus published on Reuters.

The company is listed on London Stock Exchange website, but under "European Trade Reporting".

how about telling us the name of the company please.

or do you think it may affect the price

cheers

fj

SAHD_Jim

Aside from whether or not your investment decision is correct, have you considered using an ISA? That way there are no further tax implications - CGT, HRT etc.

If you are looking at simply buy and hold, look for the broker with the lowest ongoing charges (low/no annual fees, low/no inactivity fees etc) rather than worrying too much about dealing fees, since you could save a few quid on the initial trade only to find it costs you £££s extra for the duration of your investment. iii, for example have no inactivity or admin fees and a £10 flat rate for trades iirc.

Obviously you would need to check your shares could be purchased in an ISA wrapper - ISAs allow shares of any company listed on a 'recognised stock exchange'

littlerussell

Happy to post the name - Vueling - although I'm not foremost asking about the shares themselves, as I appreciate that as another poster has said, that any opinions (including my own) are entirely speculative.

My logic is that Vueling are pursuing a strategy to move away from a largely internal Spanish airline who no one has heard of and into becoming a pan-European airline in the same marketplace as Ryanair, bmi etc. They are 51% owned by Iberia and seem to be developing into Iberia's 'budget' option. They are developing links with oneworld/BA. Their figures look pretty good. Analysts are overall saying 'buy' - although just checked back to Reuters and the figures aren't as strong as I posted, have seen the 100% saying 'buy' somewhere. Airline shares seem to have been hit very hard over the last 12-18 months. Vueling's past high performance is £45 against £8 now (and has been steady for last 2-3 years).

I am usually ridiculously cautious and leave money sitting around in my savings account. I don't want to play the stock market as a game (ie researching companies I know nothing about). I have £2k which I can invest - a reasonably small % of savings - and I'm not planning on gambling my home or anything!

I just need to get my head round the implications of tax etc.

littlerussell

SAHD Jim -

ISAs are one of the things confusing me.

I understand that where savings are paying income (ie interest), ISAs make that tax-free.

I can't get my head round the tax implications of selling shares, so I can't work out whether an ISA would be necessary?

Suppose I bought £2k shares, and sold a few years down the line for £3k. Are there any taxes payable here?

Lokolo

No tax will be due on that, but you would save money if you went over Capital Gains allowance by using an ISA.

You also do not have to pay higher rate dividend inside ISA.

littlerussell

Thanks, that clarifies the tax.

Looking at Hargreaves Lansdown Share Account - any comments?

masonic

littlerussell wrote: »

Thanks, that clarifies the tax.

Looking at Hargreaves Lansdown Share Account - any comments?

Only one - they are not very competitive on charges for shares.

Have you considered x-o or iii?