Brokerage eToro has announced that it will charge stamp duty reserve tax (SDRT) to clients opening new positions in stocks listed on the LSE.
The broker noted that the decision applies to both manual trades and positions within copy trading as well as smart portfolios.
Stamp Duty Reserve Tax is a regulatory transaction tax levied by the UK government on electronic purchases of all UK-listed shares. The tax rate is currently set at 0.5% of the purchase price of the shares.
The estimated stamp duty is displayed when you open live positions in stocks listed on the London Stock Exchange (LSE). According to the eToro website, this is done by clicking on "Open a Trade" at the bottom of the screen. If the shares are listed on the LSE but not in the UK, there is no stamp duty.
The tax is subject to a conversion fee, as all UK stocks are denominated in British pounds and eToro's platform operates in US dollars.
The broker also points out that stamp duty does not apply to CFDs and ETFs with UK stocks.
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