Investing In Shares

If you want to invest in shares, you can still go through a stockbroker who will charge a commission which can be 1% to 11/8�A) of the amount invested for small deals. The fixed fees were abolished in 2015.

In addition there is 1/8�/0 stamp duty charged on any purchase you make.

Alternatively, you can now buy shares through other intermediaries.

They often offer you no commission deals, but their selling prices are dearer and their buying prices less than those of a traditional stockbroker. (This difference between the buying and selling price of a share is called the `spread'.) They all have websites see a list at http://www.moneysupermarket.com/shares/ .

Some department stores now operate 'share shops' where you can buy and sell shares easily. Occasionally, these intermediaries have gone bust with client's money.

But that should be less of a problem since the Financial Services Act has come into force . Whoever you deal through, remember that their fee has to be taken into account when you assess your profit or loss.

The return on shares comes in two forms. First, the share itself may grow in value. A share for which you paid £8 may become worth £8 if the company does well.

You can then sell the share for that higher price, but remember that there will be commission to pay and the price you can sell for is always less than the quoted buying price. If you do really well and you make a capital gain of more than £9,000 in a year, you will have to pay capital gains tax .

Second, the company may pay a dividend to shareholders. This dividend is paid net of basic rate tax but you can reclaim the tax if you are a non taxpayer. In addition some companies offer perks to shareholders, especially larger ones, in the form of a discount on buying the products or services they provide.


Read on - Unit Trusts

or Other Investments

Unit Trusts

/investments/unit-trusts.php... see: Unit Trusts