eToro customers must pay stamp duty

As eToro's consistent transparency commitment informs clients that, from 6 November 2023, they will pass on the stamp duty reserve tax to clients who establish new positions in UK-listed shares.。

In the past, eToro absorbed this tax on behalf of clients who invested in UK equities, but now they will pass on this cost to their clients to comply with industry standard practices.。

What is Stamp Duty?？

Stamp duty is a regulatory transaction tax imposed by the UK government on the purchase of all UK-listed shares electronically, currently at a rate of 0% of the purchase value of the shares..5%。This is a mandatory regulatory transaction tax that applies to all customers who trade UK-listed shares, regardless of their country of residence.。

• Stamp duty applies only to UK shares listed on the London Stock Exchange (LSE)。ETFs containing UK shares are not affected。
• From 6 November 2023, stamp duty will only be levied when new positions are established。Existing positions are not affected。
• The tax rate is 0 of the total value of open positions in US dollars..5%。
• Minimum charge is 0.01 USD。If the calculated stamp duty is less than 0.$01, no stamp duty。
• Stamp duty does not apply to CFD transactions。
• eToro will not receive any revenue from stamp duty。The tax will be forwarded to HM Revenue and Customs (HMRC).。

How to avoid paying stamp duty on UK shares？

If you don't want to pay UK stock stamp duty, the easiest way is to trade stock derivatives, which are derived from the company's share price, such as stock CFDs or stock spread bets。

With CFDs and financial spread bets, you're not buying or selling the underlying asset, you're just guessing the rise or fall of the price。A CFD is the difference between the opening and closing price of a trade, but is effectively equivalent to buying 10,000 shares of the company's stock.。A spread bet is the bet amount per move, not the investment。So instead of buying 10,000 shares, you're betting £10 for every penny change in the share price。

eToro does not offer financial spread betting, but you can trade CFDs with it。However, eToro's overnight funding is very expensive compared to other brokers, so if you hold a position for more than a few weeks, the cost of daily funding will exceed stamp duty.。