ETF - Stamp Duty

jimjames

Just seen this on the BBC from the Autumn statement today. I'm looking for more clarification but does this now mean you can buy ETFs without stamp duty or the shares inside them no longer attract SD? If it means investors no longer pay SD then that could be quite a boost to ETFs compared to unit trusts and investment trusts and affect how investments are bought on platforms going forward.

Stamp duty on shares purchased in exchange traded funds abolished.

http://www.bbc.co.uk/news/uk-politics-25232742

Porcupine

jimjames wrote: »

Just seen this on the BBC from the Autumn statement today. I'm looking for more clarification but does this now mean you can buy ETFs without stamp duty or the shares inside them no longer attract SD? If it means investors no longer pay SD then that could be quite a boost to ETFs compared to unit trusts and investment trusts and affect how investments are bought on platforms going forward.

I've been wondering that. I suspect it won't make a huge difference for investors as many ETFs are domiciled in Ireland to avoid the stamp duty when buying ETF units. So it'll just mean it's competitive to domicile in the UK. Which is also a sock in the eye for Paris because they have similar levies.

I don't have any details, but I suspect buying the underlying shares will still cost - if they're UK-listed shares then stamp duty is still payable, just like any other share purchase.

talexuser

Listened to the same thing and immediately wondered if ALL of any savings will be passed on to customer charges...

Freecall

When I heard it I interpreted it as being intended to encourage ETF's to domicile in the UK (In fact I think that he actually said that).

Therefore it will make no difference from an investors point of view just that over time domicile of ETF's will move from Ireland to the UK.

Assuming it works that is.

gadgetmind

Yes, shouldn't make a difference to investors as ETFs have been forced off-shore. Whether this will lure them back I really doubt - why move into a jurisdiction with policies that tend towards both high taxes and knee-jerk changes to tax legislation?

Glen_Clark

gadgetmind wrote: »

Yes, shouldn't make a difference to investors as ETFs have been forced off-shore. Whether this will lure them back I really doubt - why move into a jurisdiction with policies that tend towards both high taxes and knee-jerk changes to tax legislation?

Precisely. Why would they move to a country where property prices are so high (unless they have got a job at the Bank of England with a £5,000 a week housing allowance), tax law is so complex, and legal fees so high.