A share's a unit of ownership in a company. To work out the value of a share, you divide the value of a company by the number of shares available. It's important to understand this when you're choosing the best shares to buy.

For example:

If a company's valued at 50 million and there are 25 million shares available, the share value is 2. But this value can rise and fall, depending on how the stock market performs and other economic factors.

Share dealing is a form of investment trading. It lets you buy and sell shares in publicly listed companies using a share dealing account.

How to buy shares

If you're wondering how to buy shares and sell shares online here's a step-by-step guide:

  1. Find an online share dealing account. Use this share dealing comparison table to compare different accounts. This'll help you find the right one for you.

  2. Open your chosen share dealing account. Transfer in however much money you want to use for buying shares.

  3. When you're ready to buy shares, choose which ones you want and buy them through your account. Then you can start share trading. That's when you buy shares and sell them through your chosen trading platform.

If you're interested in how to buy shares in other ways, you could use a traditional stockbroker, financial adviser or investment manager. You can find out more about share dealing here.

Which are the best shares to buy?

When you're buying and selling shares, you'll need to think carefully about what you choose to invest in.

You should think about how much you want to invest; how long you want to invest for; and how much risk you're willing to take.

If you're looking for help on which companies or stocks to invest in, it's a good idea to get the advice of a financial adviser or broker.

Buying shares through a share dealing broker

If you're thinking about how to buy stocks, UK investors sometimes like to use a specialist broker. They act as a middleman between you and the stock market.

A broker will buy stocks and shares, and sell them, on your behalf. They'll be aiming to get the best price possible for you.

There are three types of share dealing brokers who can buy shares on your behalf. If you want to use a broker, you'll need to know how to buy and sell shares through each type before you choose one.

Execution only brokers follow your instructions to buy shares - and sell them - without giving you any financial advice.

Advisory brokers advise you on the best shares to buy and sell but leave the final decision up to you.

Discretionary broker take complete control of buying stocks and shares for you. But they usually have higher share dealing charges on their services.

If someone else is going to be buying shares on your behalf, you'll need a brokerage account.

What is the best online share dealing platform?

If you're interested in buying shares online, you'll need to choose an online share dealing platform. The share dealing account comparison above shows brokers that let you make share dealing trades online.

When you're deciding which platform to buy shares on ask yourself these questions:

  • How often do you want to trade?

  • How experienced are you?

  • How much money do you want to invest?

It's important to think about your own personal needs and goals when choosing a share dealing platform.

Buying and selling shares

You'll use your trading platform to buy and sell stocks and shares.

When you want to sell, you can either sell a specific number of shares, or sell your shares by their value.

If you want to sell all the shares you own in a company, you'll have to sell them by number.

It's important to know that when you sell your shares, you might be quoted a price that's lower than what you originally paid.

Once you make the order to sell, the transaction's done. The money from the sale will then appear in your trading account.

Paying tax on shares

You will not need to pay tax on your profit or purchases if your shares are held in an ISA. If they are not, you may need to pay capital gains tax and stamp duty.

You will need to pay 0.5% of the trade's value in Stamp Duty Reserve Tax (SDRT) if you buy UK shares that are settled through CREST (the UK electronic settlement system).

If you buy shares that cannot go through the CREST system (known as 'residual securities') you will still need to pay 0.5% SDRT, but rounded up to the nearest multiple of 5 and only on trades with a value of over 1,000.

When you sell your shares, the amount of capital gains tax you pay will depend on which income tax bracket you are in and how much money you make from the sale. In the 2020-21 tax year, capital gains tax is 10% for basic rate taxpayers and 20% for higher and additional rate taxpayers.

For the 2020/21 tax year there is a capital gains tax-free allowance of 12,300. Your gains would need to exceed this in order for you to be required to pay capital gains tax.

What costs to look out for when you start share trading

Before you open a share account and start looking at how to buy shares, there are some share dealing costs to think about.

The charge per trade is how much you pay for making a single share dealing trade.

The frequent trader rate is a discounted charge per trade for doing a minimum number of deals each month. It's a good way to save on your share trading.

Platform fees are an annual cost for transferring money in or out of your stock account. But not all accounts charge these - most accounts are free.

It's important to look at share dealing fees before you make any decisions.
The share dealing comparison shows how much each share dealing account charges you per trade.

How can shares earn you money?

When you start buying shares and selling them, there are a couple of ways you can earn money.

One way is through growth. That's when your shares increase in value and you can sell them at a profit.

The other way is through dividends. These can be paid out a few times a year, based on company performance. Remember that not all shares offer dividends. If yours do, the amount they'll pay out is based on how many shares you own.

Share dealing FAQs


Do I pay tax on share dealing?


Yes, any profits are subject to Capital Gains Tax and you also must pay 0.5% Stamp Duty. Here is more on investment tax.


Can I use a share dealing telephone service?


Some companies let you buy and sell shares over the phone, but the charges can differ to online dealing. Check the charges before you apply.


How can I cut the cost of share dealing?


If you plan to make several trades each month a frequent trader account could reduce your cost per trade. Check the terms with each company.


Can I buy shares in any company?


No, only companies that are listed on stock exchanges, like the London Stock Exchange (LSE) or the Alternative Investment Market (AIM).


Can I deal in shares through a mobile app?


Yes, but only if the company offers a mobile app. You still need to open an account online and add money before you can make any trades on the app.


Can I transfer shares from one broker to another?


Yes, but you are usually charged for transferring shares from each company, e.g. if you own shares from two companies, you pay two lots of charges.

About our share dealing accounts comparison


Who do we include in this comparison?


We include share dealing accounts from our panel. They are regulated by the Financial Conduct Authority (FCA).

Here is more information about how our website works.


How do we make money from our comparison?


We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.

Last updated: 29 December 2020