Making an investment, buying shares online is very easy to do these days due to the wonder of technology and internet dealing platforms.
With most brokers you will type in a share "symbol" (all stocks have an abbreviated name or "epic" usually consisting of 3 or 4 letters like BARC - Barclays Bank)
you will then be given an up to the minute bid and offer price at which point you can buy or sell the shares with the click of your mouse.
However you must be aware these share buys are very real, and your money on deposit will be taken to pay for your share transactions.
Once your shares are purchased you will be given an "order" detailing the cost,taxes,charges and settlement date. Your broker should also offer an online portfolio
section where you can see the current value of the shares you own at real market prices. This feature is a great tool for a quick overview of the performance of your holdings.
Charges, Commissions , Taxes
Most banks or brokers will charge a commission for execution of the transaction of your shares.
Prices will vary with most online brokers, between very cheap (under ten pounds) to maybe twenty pounds per transaction. Often it's far cheaper to buy shares online due to being no admin costs, however make sure you ask if it costs more to complete a transaction by telephone should your internet connection down or broker offline.
Stamp duty reserve tax (for UK residents) will be added to your purchase price.
This currently stands at a rate of 0.5 per cent of the value of the transaction.
In the UK if you buy shares in value over £10,000 you maybe charged a small PTM Levy fee. This is a small
contribution to the Panel of Takeovers and Mergers.The Panel writes and enforces the rules by which takeovers of companies listed on the London Stock Exchange are conducted.
If the profit on your shares passes a threshold amount and you "sell" shares to gain your profit then you may be liable to Capital Gains Tax.
This is a very complicated taxation process, and you are best advised by a professional financial advisor or accountant. However in our brief guide you will find basic information about capital gains tax rates and reliefs.
Back to share dealing.