Stamp duty on sub £1k trades

[McTrucky]

Hi,

I have done a few trades now (in an ISA on the LSE) and have sucked up the 0.5% cost on all but one - where I bought only £600 worth of something.

It strikes me that if I wanted to buy, say, £3k worth of stock I would be better off buying £999 of that stock three times.  There would be a commission of £3 on each trade, but no tax charge.  Thus my costs would be 3x£3=£9 as opposed to 1x£3 + 0.5%x£3000 = £18.  Not a huge saving, but still....

Is this correct, and is this legal/ethical?

 

Thanks

Alan

[AndaIG]

Hi @McTrucky

Thanks for the query, 

This would be true if you were trading in certificate form. However when trading with IG you trade in nominee form which still attracts Stamp duty regardless of the trade size. So in your example it would be more expensive as you would still pay the stamp duty for each transaction as well as the added commission costs. 

All the best, 

Anda

[McTrucky]

Thanks for that.  Understood, but...  I don't understand why I didn't have a charge on a £667 order for International Consolidated Airlines Group on the LSE.  That was bought on a limit order rather that a 'Buy Now' type transaction.  I subsequently sold, again on a limit order and made a modest profit.  Any ideas why I am not seeing the stamp duty charge? 

 

[AndaIG]

Hi @McTrucky

Thanks for the response. 

Stamp duty is payable on most but not all UK stocks. IAG LN is one of the exempt stocks. Best way to see this is to check if the ISIN begins with a GB, if not then it is unlikely to qualify. 

All the best

Anda