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Beginners guide to online share dealing

By leah cassady  |  Posted: December 12, 2012

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Commercial Feature

Online share dealing offers a service whereby individuals can buy and sell stocks and shares online. Here’s everything you need to know to get you started.

How do I get started?

There are a variety of different providers offering a share dealing account to users who can sign up with their bank details, debit card, and just a few hundred pounds.

How do I choose the right account?

Before you open up an account you need to think about how much you’ll be losing it. Most providers charge you each time you make a transaction, with some offering discounts for a high volume of transactions whereas others may charge you for inactivity. The right account for you will all depend on how you use it.

What can I invest in?

Again this will depend on the provider you choose, with some leading providers offering over 2,000 investment funds to choose from. These range from government bonds, corporate bonds, permanent interest bearing shares, exchange traded funds and commodities, and securities quoted on a recognised stock exchange.

Do I have to pay tax?

Any profits or gains you make when you “dispose” of any shares or assets you hold will be subject to Capital Gains Tax. You usually dispose of an asset when you cease to own it, i.e. you might sell it, give it away, transfer to someone else or exchange it for something else. The formula HR Revenue & Customs use to work this out involves looking separately at each asset to work out each gain and loss; any losses will be taken away from the gains and then deducted from your tax-free allowance. Anything that remains will be liable to have tax paid on it.

Will I make money?

As is the case with any kind of investment there is the potential to make some real money, but you could also lose out and come away with less than you initially put in. It pays to pick your investments wisely and view it as a long term investment. Independent financial advice is also useful.

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