📢 IMPORTANT UPDATE
Starting from November 6, 2023, we will be passing a Stamp Duty Reserve Tax onto clients who open new positions in UK-listed stocks.
In the past, we have absorbed this tax on behalf of clients who invested in UK stocks however, we will now be aligning with industry standard practice by passing this cost onto clients.
1️⃣ What is Stamp Duty Reserve Tax on Stock Trading?
Stamp Duty Reserve Tax (SDRT) is a regulatory transaction tax that the UK government levies on the electronic purchases of all UK-listed stocks. It is currently set at 0.5% of the value of the stock purchase.
2️⃣ On what asset types is SDRT due?
SDRT is only due on UK-listed stocks (real). At eToro, we only offer UK stocks listed on the London Stock Exchange (LSE). IIf a stock is listed on the LSE, but it is not UK-listed, the stamp duty does not apply.
3️⃣ Do users need to pay SDRT on ETFs with UK stocks or on CFD trades
No. SDRT is not added to the purchases of ETFs containing UK stocks since the tax is taken and included in the ETF fees (which are included in the PnL of the ETF).
With CFDs, the user does not take possession of the underlying stock. Therefore they are not subject to SDRT.
4️⃣ Who should pay SDRT?
All users from any country who buy UK-listed stocks must pay SDRT.
5️⃣ When is SDRT charged?
The tax is executed when the user opens a new position ONLY.
6️⃣ How is SDRT calculated?
It is calculated as 0.5% of the total USD value of the opened position.
📝Note: There is a minimum fee of $0.01. If the calculated amount of SDRT is less than $0.01, there will be no tax applied.
7️⃣ Are there any currency conversion costs?
The tax is paid to the UK HM Revenue and Customs (HMRC) in GBP. All UK stocks are based in GBP. So when the position is opened, we automatically convert the position value and any SDRT fee amount from USD to GBP. Both will be subject to the eToro trading conversion rate which includes a spread of 1-2 PIPs.
Note that the SDRT fees are expressed in USD in the app.
8️⃣ What happens when Copy or Smart Portfolio investments include UK-listed stocks?
When the user opens a Copy or Smart Portfolio position any UK-listed positions opened will include the SDRT as with manual trades. The same occurs when a copied user buys a UK-listed asset after the Copy/Smart investment is open.
9️⃣Is this a revenue-generating fee for eToro?
No. eToro simply passes the tax on to the UK government. We do not mark up or retain any proceeds from the tax.
🔟 Will we charge the fee retroactively for UK stock positions already opened?
No. The fee will only be applied to new positions after the fee is introduced.
For more detailed information, please visit our help center or consult your tax professional if you have further questions regarding how Stamp Duty fees may affect your tax return.
- The eToro Team
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Its unbelievable whats happening. Cinema world exiting chapter 11. Shares nullified. Etoro closing opened positions as share price even so invested over 1700 dollars. Is this even real? For me this sounds like a scam. Is there anything i can do about it? ... Show More
