Stock trading fees and taxes
Consumers Home Business Home. Stocks and shares can be complex for the first-time investor. In this section you will find information to help you understand how they work. A share is a small part of a company that you can buy for a set price. Share prices can move up or down in value, depending on the performance of the stock market, the current profitability of the company and the expected future profitability or potential of the company. The aim is to invest in shares that increase in value over time.
When you buy shares, you become a shareholder in that company. Buying shares involves choosing companies that have the best potential to grow profits. It also means choosing business sectors that have the best growth potential. The golden rule is not to invest money that you cannot afford to lose. Only a stockbroker can buy or sell shares on the stock market.
You can buy and sell shares by going directly to a stockbroker, through your local bank, through an investment broker, or with online share dealing. Some banks also operate online share dealing services.
Regardless of who you approach, a stockbroker will still be used to buy the shares. Always make sure your provider is regulated before you invest. Therefore, you may want to get professional financial advice before investing in shares.
Certificates are no longer used in many countries and will be phased out in Ireland in the coming years. They will be replaced with a new type of electronic account that allows you to buy and sell shares more easily by quoting your account reference number.
Fees vary from one stockbroker to another, and depend on the type of service you use. Usually, you will pay the highest fees for a discretionary service and the lowest for an execution only service. Typical commission rates for buying and selling shares are a percentage of the purchase or sale value or a minimum flat fee. Some stockbrokers offer reduced commission rates on deals over a certain stock trading fees and taxes.
When stock trading fees and taxes buy shares, you have to pay stamp duty on the value of the shares you buy. You can get details on the current stamp duty rate from Revenue. Stamp duty is paid through your stockbroker. You also have to pay tax on any dividends you get. Your stockbroker will provide you with a tax receipt for any dividends you earn. You will need to send these receipts to Revenue with your normal tax returns each year.
If you make a profit above a certain amount in any tax year from the sale of your shares, you will have to pay capital gains tax CGT. If you make losses on the sale of other shares within the same tax year, you can offset these stock trading fees and taxes against any profits to reduce the amount of CGT you must pay.
Your stockbroker will provide you with the necessary paperwork to send to Revenue with your tax returns. Your dividends are paid directly to you. They are costly to replace if lost or stolen. A time delay in selling could lose you money if the share price falls. Nominee account electronic You can avoid unnecessary documents.
You can instruct your stockbroker to buy or sell instantly using your reference number. You are not the legal owner of the shares. The stockbroker controls your shares, including dividends. Stock trading fees and taxes personal accounts electronic You legally own the shares.
You pay an account service fee. You must deal with your own stockbroker. They track the performance of a particular index made up of a basket of sharessuch as the ISEQ 20 Index — an stock trading fees and taxes of the leading shares quoted on the Irish Stock Exchange. An index may also be made up of a basket of shares tracking a certain industry or sector, for example gold, oil and gas, water, alternative energy, coal or utilities.
If your ETF is tied to the value of an index and the index rises in value, your investment will also rise in value. Similarly, if the index your ETF invests in falls, your investment falls. ETFs are more flexible than unit-linked funds or tracker bonds as you can buy and sell them in the same way as you would buy and sell shares on the stock exchange. Search Please enter a search term. Stocks and shares Stocks and shares can be complex for the first-time investor. What is a share? There are several ways you can invest in the stock market: Stock trading fees and taxes of pooled investments are unit-linked funds.
What are the benefits and risks of shares? Benefits — you can potentially earn a good return on your investment from selling shares that have gone up in value since you bought them.
You may also benefit from any dividends the company you have invested in may pay. Rememberyou will have to pay tax on both your profits and your dividends. Risks — if your shares fall in value you can lose a lot of money when you come to sell them.
Share prices can rise or fall quickly, which makes them more volatile and risky. So, ask yourself if you can afford to take a risk with all or some of your money. How to buy and sell shares Only a stockbroker can buy or sell shares on the stock market. A stockbroker may offer three types of accounts to you: How can you hold your shares?
You can hold shares either: In paper form as share certificates Electronically in a nominee account or a Crest personal member account Certificates are no longer used in many countries and will be phased out in Ireland in the coming years.
Charges Stockbrokers usually charge: Fees, depending on the type of service you use Commission for buying and selling shares Stamp duty is also charged by the Government. Taxes and profits When you buy shares, you have to pay stamp duty on the value of the shares you buy. Ways of holding shares Options Benefit Costs or risks Share certificates paper-based You legally own the stock trading fees and taxes. You receive all documents.
They expose you to fraud if they fall into wrong hands. You must present them if you decide to sell your shares which can cause delays. You get regular statements showing the shares you hold and any trading you have carried out.
You must deal with your own broker. The fee is usually lower than typical charges for managing funds in a unit-linked or other pooled fund.
You may get dividend payments When buying or selling, your stockbroker will generally quote prices stock trading fees and taxes on the value of the shares, plus their commission and any trading fee You do not have to pay government stamp duty You may be a minimum investment amount to avail of an ETF Tags: Money Reduce your current account fees Banking Opening an account Current accounts Choosing your current account Budget accounts Switching accounts Bank cards Disputed card transactions chargeback Paying bills Transferring money Using money abroad Overdrafts Mortgages Applying for a mortgage How much of a mortgage can you get?
Types of mortgage Mortgage interest rates Switching your mortgage — review your options Mortgage fees and charges Mortgage interest relief Refused a mortgage?
Equity release Changing your mortgage Mortgage payment breaks Extending the term of your mortgage Paying extra off your mortgage Mortgage top-up Consolidating debts Switching from a subprime mortgage Trading up or trading down Mortgage arrears Rebuilding Ireland Home Loan Mortgage protection insurance Saving How much can you save?
Financial advice — the costs involved Meeting your financial adviser Scams Rental accommodation stock trading fees and taxes Online ticket scams Phishing Pyramid schemes Lotteries and premium rate scams Scams — what to watch out for Insurance Mortgage protection insurance Car insurance Payment protection insurance Travel insurance Getting insurance quotes Income protection insurance Whole of life insurance Serious illness insurance Pet insurance Making an insurance claim Home insurance Life insurance Health insurance Gadget insurance Saving options If investing is not for you, find out more about different saving options.
Getting financial advice Financial advisers can help you understand the benefits and risks of investing. Get regular updates and tips on your rights, how to complain, managing stock trading fees and taxes money and unsafe products.
You can avoid unnecessary stock trading fees and taxes.