Stamp Duty on Investment Trusts?

Audaxer

Am I right in understanding that you have to pay 0.5% Stamp Duty on every purchase of Investment Trusts? If so the charges are not as cheap compared to funds as I originally thought.

Linton

Yes ITs are just shares.

Glen_Clark

You should be buying shares as a long term investment which makes the Stamp Duty on purchases insignificant.
But if you are buying shares for the short term (not recommended) you can avoid the stamp duty by buying ETFs.

AnotherJoe

A one off 0.5% for an investment you might hold for 10 or 20 years is an irrelevance.

george4064

I may be wrong, but any purchases into investment trusts that are incorporated in Ireland (ie with an Irish ISIN 'IE') will NOT attract stamp duty.

bowlhead99

Audaxer wrote: »

Am I right in understanding that you have to pay 0.5% Stamp Duty on every purchase of Investment Trusts? If so the charges are not as cheap compared to funds as I originally thought.

A one off half a percent on all your invested money, assuming you're holding for years, won't break the bank.

If you use a 'fund' (OEIC or UT) then every time you or anyone else subscribes to the fund and it wants to go and buy more investments with the new cash that it's got, it will have to pay stamp duty when buying those new investments. (assuming the investments are UK-based).

If the closed ended vehicle (investment trust or investment company) you're buying is UK listed but not UK resident (eg Guernsey, Jersey, Bermuda, Ireland, BVI etc) you generally won't pay stamp duty to buy in.

Audaxer

Thanks for the responses. I suppose as a one-off charge it's not going to break the bank, and a good point is that the platform charges in relation to ITs are cheap as I am planning to use AJ Bell YouInvest which charges £30 annually in total for all ITs held.

cloud_dog

Or, go with X-O (Jarvis) for example and don't pay £30pa platform charge.

X-O have a £5.95 dealing charge compared to AJ Bell £9.95 (or £4.95 for frequent traders), plus X-O do not offer a regular investment option (AJ Bell £1.50).

EDIT: X-O does have a closure fee in addition to transfer out charges (haven't compared X-O and AJ on transfer / closure charges)

jimjames

Audaxer wrote: »

Thanks for the responses. I suppose as a one-off charge it's not going to break the bank, and a good point is that the platform charges in relation to ITs are cheap as I am planning to use AJ Bell YouInvest which charges £30 annually in total for all ITs held.

Or iWeb that charges a one off £25 and no annual fee