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The Dividend Investor: A practical guide to building a share portfolio designed to maximise income by Rodney Hobson

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Chapter 5. Tax

It’s great to be earning a return on your careful investment but, alas, the Chancellor of the Exchequer wants his cut. There are three main taxes that are likely to affect dividend investors:

  1. stamp duty
  2. income tax
  3. capital gains tax.

We will look at each in turn below.

1. Stamp duty

For a start, we are stuck with the 0.5% stamp duty on share purchases. Various campaigns to have this impost scrapped, most notable at one stage by the London Stock Exchange, have prompted not a glimmer of interest from successive Chancellors of the Exchequer.

Nor has the emergence of financial spread betting or contracts for difference, which avoid stamp duty, forced any official rethink.

It is just too easy a tax to collect and is ...

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