You can deduct certain costs of buying or selling your shares from your gain. These include: fees, for example stockbrokers’ fees. Stamp Duty Reserve Tax ( SDRT ) when you bought the shares.
Is there stamp duty on US shares? No, no stamp duty is payable when you buy shares that trade on the US markets.
Are there Reliefs and Exemptions for Stamp Duty?
- shares in a company that is not incorporated in the UK and doesn’t maintain a UK based share register.
- stock quoted on a market outside the UK.
- gilts or corporate bonds.
- shares issued in a flotation, or new shares issued in a rights issue.
Stamp duty chargeable by reference to consideration
The rate of duty is normally 0.5% of the consideration (or, in certain circumstances where either of the stamp duty market value rules applies, the deemed consideration) for the transfer of the stock or marketable security.
Taxation of Gains from Equity Shares
Special rate of tax of 15% is applicable to short term capital gains, irrespective of your tax slab. Also, if your total taxable income excluding short term gains is below taxable income i.e Rs 2.5 lakh – you can adjust this shortfall against your short term gains.
Compared to the transfer of existing shares, the issuing of new shares does not attract HM Revenue and Customs stamp duty and thus might provide an added incentive to steer towards this option.
When it comes to Stamp Duty charges, these are incurred by buyers but not sellers. If you buy shares electronically you’ll pay the Stamp Duty Reserve Tax (SDRT) at 0.5% on the transaction. A full update on Stamp Duty charges is available on the Government’s information page on tax when you buy shares.