Why is it so expensive to trade in shares in UK

sarah_id1

I've been thinking to invest in share but considering the cost of buying, selling, so called 0.5% "Stamp duty" tax makes me step back every time. As opposed to trading in Indian stock market with as little as 0.03% of brokerage charge on buying and selling (for intraday) with no other tax whatsoever.

kingdavid2012

We just pay for their administering job.And different places have different tax.

View it this way:if you're not acting cautiously you not only lose your investing money but have to pay the tax as well.

dunstonh

Perhaps India should increase it's taxation and deal with it's extreme poverty rather than allowing the wealthy to benefit from low taxation.

I assume that we dont need to compare public services in the UK with India for you to realise the difference?

gadgetmind

sarah_id1 wrote: »

I've been thinking to invest in share but considering the cost of buying, selling, so called 0.5% "Stamp duty" tax makes me step back every time.

The dealing fees are insignificant if you buy in chunks of (say) £2k plus, and both these and stamp duty are insignificant if you intend to hold for a long time.

For smaller amounts and short-term holdings, you might find CFDs a better option - I don't know as I don't use them.

grey_gym_sock

in terms of just your own interests, stamp duty should only put you off if you'd be buying and selling again after a very short time. it's not significant if you hold a share for years.

there is no minimum stamp duty, so the amount you invest doesn't matter for stamp duty.

buying small amounts of shares (less than £1k or £2k) may be uneconomic because of the dealing commissions, which tend to be either a flat rate or have a minimum.

psychic_teabag

spreadbetting is another possible way to reduce costs for short-term holdings. You just have to sure you fully understand the implications of the leverage.

http://www.fool.co.uk/news/investing/2011/01/26/share-dealing-vs-spread-betting.aspx compares costs of spreadbetting vs the traditional approach, for different amounts and holding periods.