UK investors face double taxation on STRC; 21Shares ETP suggested as an alternative

ChainCatcher report: Strategy’s preferred shares, STRC, listed on the UK trading platform Trading 212 on March 30, offering an annualized yield of approximately 11.5%. However, UK investors directly holding STRC may face significant tax burdens. In the U.S., monthly STRC distributions are classified as return of capital (ROC) and are not subject to tax; however, UK brokers typically classify them as foreign dividends, subjecting them to income tax at the marginal dividend tax rate—8.75% for basic-rate taxpayers and up to 39.35% for higher earners—plus capital gains tax (CGT) upon sale, resulting in an estimated net yield of only around 10%. Cryptocurrency analyst James Van Straten recommends that UK investors consider instead the 21Shares Strategy Yield ETP, listed on Euronext Amsterdam and Paris. This product has a zero management fee, employs an accumulating structure where returns are automatically reinvested rather than paid out in cash, and typically incurs only CGT upon sale with no income tax liability, offering significantly better tax efficiency.