A share trade costs more than the share price. We break down every charge, from the dealing fee to the taxes collected in the background, and show what small trades really cost with worked examples.
Summary
- Dealing charges are paid on both buying and selling; one large UK platform caps its online share trade fee at £6.95 per trade.
- Stamp Duty Reserve Tax of 0.5% applies to most electronic purchases of UK shares and is collected automatically.
- UK share trades above £10,000 attract an extra fixed PTM levy of £1.50 per trade.
- Percentage account charges, up to 0.35% a year at one major platform, apply whether you trade or not.
- Broker fees and SDRT paid on purchase can be deducted when working out a Capital Gains Tax bill on shares sold outside an ISA.
A share trade looks simple on screen: a price, a click, a confirmation. The bill is bigger than it looks. Between the dealing charge your platform takes and the taxes collected in the background, buying £2,000 of UK shares can cost more than £16 before the price moves, and selling costs again. This breakdown sets out each charge, who takes it and when it applies, so occasional investors can see what small trades really cost.
Dealing Charges: The Fee Each Trade Starts With
The dealing charge is a flat fee your platform, the service that holds your investments and places trades, takes each time you buy or sell. It is charged per trade rather than per pound, so placing a £500 order costs the same as placing a £10,000 order on many platforms. One large UK platform, as an example of the typical range, charges no more than £6.95 per online share trade, and from £1.95 to deal in funds.
The flat structure cuts both ways. On a £2,000 trade, a £6.95 fee is roughly 0.35% of the amount invested. On a £300 trade it is more than 2%, a hurdle the shares must climb before you break even. The fee also applies on the way out: selling usually costs the same as buying, so a complete round trip costs the dealing charge twice.
Platform and Account Fees That Run in the Background
Alongside the per-trade fee, most platforms take an annual account charge, worked out as a percentage of everything you hold. At the platform used above, the maximum is 0.35% a year, billed monthly. On a £5,000 portfolio that is £17.50 a year; on £50,000 it is £175.
Percentage charges scale with your balance, which keeps costs low for small portfolios but grows expensive for large ones. Some platforms use a flat cash fee instead, which flips that trade-off: cheaper for big balances, dearer for small ones. Funds held in the account carry their own ongoing charges as well, set by the fund manager and separate from the platform’s fee.
Taxes on UK Share Purchases: SDRT and the PTM Levy
The largest single cost on a UK share purchase is usually tax. When you buy shares electronically you pay Stamp Duty Reserve Tax (SDRT), a tax on the agreement to buy shares, charged at 0.5% of the purchase price. Most electronic deals settle through CREST, the UK’s computerised register of shares and shareholders, and the tax is taken automatically, so there is nothing to file or pay yourself.
SDRT covers existing shares in companies incorporated in the UK, interests in shares, and shares in foreign companies that keep a share register in the UK. No tax is due when you subscribe to a new issue of shares, buy shares in an open ended investment company (OEIC) from the fund manager, are given shares for nothing, or, in most cases, buy foreign shares outside the UK. A higher rate of 1.5% applies to transfers into some depositary receipt schemes and clearance services, arrangements used mainly by market intermediaries rather than individual investors.
Purchases made on paper, using a stock transfer form, attract Stamp Duty rather than SDRT, but only if the transaction is over £1,000. The rate is 0.5%, rounded up to the nearest £5, and payment must reach HM Revenue and Customs (HMRC) within 30 days of the form being signed and dated. Late payment can bring interest and penalties. The government plans to replace Stamp Duty and SDRT with a single Securities Transfer Tax, due in late 2027.
Larger UK share trades carry one more charge. The PTM levy, sometimes shown on statements as PTM Tax, adds £1.50 per trade to UK share trades above £10,000. It is fixed and easy to miss, because it never touches smaller trades.
When you sell, the tax picture changes rather than disappears. Shares held outside an ISA may trigger Capital Gains Tax (CGT), a tax on profit above your annual allowance for the tax year. Shares inside a stocks and shares Individual Savings Account (ISA) are not subject to CGT when disposed of.
Currency Conversion and Foreign Transaction Taxes
Buying shares listed overseas adds two further costs. The first is currency conversion: your pounds must be changed into the currency the shares trade in, and platforms charge for this, either as an explicit percentage fee or through the exchange rate they offer you. HMRC’s guidance for paper share transfers points to the Bank of England’s published daily exchange rates as a reference, which makes it easier to judge how far a platform’s rate sits from the market rate.
The second is tax charged by the country where the shares are listed. Buying Irish shares attracts Irish Stamp Duty of 1%, and certain French, Spanish and Italian shares carry a Financial Transactions Tax of between 0.2% and 0.4% depending on the country. These sit on top of your platform’s own charges, and dealing in overseas shares often costs more than dealing in UK ones.
The trade-off is built in. Overseas shares widen your choices, but each extra layer, conversion, foreign tax and a higher dealing charge, takes a slice of the trade.
Worked Example: What a Few Trades Actually Cost
The table below follows two UK share purchases at a platform with the charges described above: a £2,000 trade and a £12,000 trade.
| Cost | £2,000 trade | £12,000 trade |
|---|---|---|
| Dealing charge (buy) | £6.95 | £6.95 |
| SDRT at 0.5% | £10.00 | £60.00 |
| PTM levy | None | £1.50 |
| Total to buy | £16.95 | £68.45 |
| Dealing charge (sell) | £6.95 | £6.95 |
| Total round trip | £23.90 | £75.40 |
On the smaller trade, the round trip of £23.90 is about 1.2% of the amount invested, before the annual account charge and before any movement in the share price. On the larger trade, the same fees come to about 0.63%, because the fixed dealing charge and the PTM levy barely register. The account charge then adds £7 a year on a £2,000 holding, and £42 on £12,000, at 0.35%.
Top tip
Costs paid on the way in can soften the tax bill on the way out. When working out a Capital Gains Tax gain on shares sold outside an ISA, stockbrokers’ fees and the SDRT you paid on purchase can be deducted from the gain.
How Costs Change for Regular Small Trades
Fixed dealing charges bite hardest on small, frequent trades. Four £250 purchases at £6.95 cost £27.80 in fees alone, nearly 2.8% of the £1,000 invested in total. Many platforms answer this with regular investing plans: at the platform described above, investing a fixed amount each month by Direct Debit carries no dealing charge at all. The annual account charge still applies, but the per-trade hurdle disappears. The trade-off is flexibility rather than money, since a monthly plan buys on a set date and you cannot choose the moment.
Checking the Full Fee Schedule Before You Trade
Platform pricing pages show the headline dealing charge and account fee, but the full schedule usually runs to several pages. Before placing a trade, check:
- the dealing charge for the exact type of investment, since shares, funds and overseas shares are often priced differently
- the account charge structure, and whether there is a cap
- currency conversion fees and the exchange rate applied
- government taxes attached to the shares, such as SDRT, the PTM levy or a foreign transaction tax
- any exit or closure fees for when you eventually move
Confirm the platform itself is authorised before paying anything in; our guide to checking the FCA register before you invest walks through that check. If a firm does fail, separate protections come into play, which we cover in what happens when your investment firm fails.
Next steps
- Five Stocks and Shares ISA Myths That Cost You Money explains how the ISA wrapper changes the tax costs of buying and holding shares.
- A Glossary of Fund Fees, from OCF to Account Charges decodes the ongoing charges that run alongside dealing fees once you hold funds.
- Check the FCA Register Before You Invest a Penny shows how to confirm a platform is authorised before you hand over any fees or deposits.
Questions readers ask
Do I pay stamp duty when I sell shares?
No. The 0.5% charge applies to purchases of UK shares. Selling is where Capital Gains Tax may apply instead, on profit above your annual allowance, and only for shares held outside an ISA.
What is the PTM levy?
A fixed charge of £1.50 per trade on UK share trades above £10,000. It is small but easy to miss because it never applies to smaller trades.
Can I avoid Stamp Duty Reserve Tax?
Sometimes. No tax is due when you subscribe to a new issue of shares, buy shares in an OEIC from the fund manager, are given shares for nothing, or normally buy foreign shares outside the UK.
Why do small trades cost proportionally more?
Dealing charges are flat fees per trade, so a £6.95 charge is a much larger percentage of a £300 purchase than of a £10,000 one. Regular monthly investing plans often waive the dealing charge entirely.
This guide is general information, not financial advice. Rules, rates and allowances can change, so check the latest details with the provider, GOV.UK or the Financial Conduct Authority before making decisions. For advice on your own circumstances, speak to an FCA-authorised financial adviser.