§ Mr. Austin Mitchellasked the Chancellor of the Exchequer if he will take steps to prevent avoidance of tax by United Kingdom residents buying and selling United Kingdom quoted shares through the ADR method in New York.
§ Mr. MooreI am not aware of any evidence to suggest that United Kingdom residents are dealing in United Kingdom shares through the ADR market in New York to any significant extent. Holding shares in ADR form has a number of disadvantages for the United Kingdom investor.
Investors are liable to tax on any dividends and capital gains in the ordinary way. Ad valorem stamp duty is payable when the shares are first deposited with the custodian bank and may be payable again when the shares are delivered by the bank in exchange for the receipt.