Iweb won't let me buy GWPH stock?

wmb194

bowlhead99 wrote: »

As an FYI, as it's a UK company and the ADRs represent a synthetic position in the ordinary shares, you should expect to pay an extra market/dealing fee equivalent to stamp duty, which you may not have seen in your other 'US traded' stocks.

ADRs aren't synthetic and SDRT isn't due on British shares on foreign registers when trading in the secondary market.

There used to be a higher rate of SDRT levied at 1.5% when shares were transferred from a British register to a foreign but a few years ago this was ruled incompatible with EU law. I don't think this was something ordinary retail investors could ever do anyway.

https://www.gov.uk/hmrc-internal-manuals/stamp-taxes-shares-manual/stsm053060

bowlhead99

wmb194 wrote: »

ADRs aren't synthetic and SDRT isn't due on British shares on foreign registers when trading in the secondary market.

Synthetic was perhaps the wrong word but effectively the underlying UK ordinary share is registered in the ADR system as a depositary share so that the depositary financial institution who holds legal title to it can issue a tradeable depositary receipt against it, passing through the rights (e.g right to receive dividends) to the holder of the receipt; it's the receipt that will typically trade on the exchange, while the share itself will continue to be owned by the depositary.

Seems you're right that ADRs are not chargeable securities for SDRT so a buyer of the ADR should be in the clear.

There used to be a higher rate of SDRT levied at 1.5% when shares were transferred from a British register to a foreign but a few years ago this was ruled incompatible with EU law. I don't think this was something ordinary retail investors could ever do anyway.

https://www.gov.uk/hmrc-internal-manuals/stamp-taxes-shares-manual/stsm053060

What you are talking about there is that if the UK company issues new shares to an (e.g.) overseas depositary, there is no special stamp duty due, which aligns the process with what happens if the UK company issues new shares to any other investor (is no stamp duty on a new issue).

Whereas if the US depositary acquires existing (rather than new) shares, the 1.5% stamp is payable.