Buying shares on NYSE

7ewis

I would like to buy some Twitter shares, once the company goes public. Hopefully to make a little bit of money, but mainly just to have the experience of buying shares, and seeing how it all works. As I have never bought any before.

I would only want to spend a few hundred £'s max.

How would I go about doing this? Can I just buy them online from a website, if so what site would you suggest?

Nick_C

You can certainly buy them on line once they are trading on NYSE. However, be aware that if you own foreign shares
(i) you have to complete a UK self assessment tax form each year
(ii) the dividends are subject to a withholding tax
I have bought shares in New York and Paris in the past using Halifax, but for the reasons stated above I got rid of them.

You can still have exposure to overseas markets by buying dual listed companies in London, or buying shares in multi nationals.

gmgmgm

If you want to "get the experience" try buying something very simple in the UK to see how it all works. e.g. £100 "ISF" in an ISA. (You may need to google those terms). Once you've gained the experience that then you'll be better prepared for gambling on further stocks.

Just to add: Nick_C's points are valid- owning US stocks is much more complex than owning UK ones.

lyallonfire

most of the uk banks have an online share trading section. you just need to create a free account and get going. Its really easy and most will have hints and tips page.

FatherAbraham

Nick_C wrote: »

You can certainly buy them on line once they are trading on NYSE. However, be aware that if you own foreign shares
(i) you have to complete a UK self assessment tax form each year.

Surely not! It's foreign income over £300/year which is a trigger for self-assessment.

Nick_C wrote: »

(ii) the dividends are subject to a withholding tax

True, but filling out a US W8-BEN form reduces that to a minimal level.

Furthermore, in this specific case, anyone who's expecting Twitter to pay a dividend anytime soon really shouldn't be buying those shares!

Warmest regards,
FA

IronWolf

Saxobank have reasonable dealing charges and foreign exchange charges, which is often a hidden cost.

You can also hedge the dollar cheaply with their trading account.

latecomer

FatherAbraham wrote: »

True, but filling out a US W8-BEN form reduces that to a minimal level.

It reduces the rate from 30% to 15%, still not what I would call minimal although obviously an improvement.

Nick_C

FatherAbraham wrote: »

Surely not! It's foreign income over £300/year which is a trigger for self-assessment.

That's not what HMRC say on their web site!!

"If you receive savings and investment income from abroad, you'll usually need to declare this on a Self Assessment tax return."

"Income counts as 'overseas income' if it comes from outside England, Scotland, Wales and Northern Ireland. So income from the Channel Islands and the Isle of Man counts as overseas income too.
Overseas savings and investment income includes ... dividends and interest from overseas companies"

http://www.hmrc.gov.uk/taxon/foreign.htm

If you have evidence to the contrary FA, please produce it.

FatherAbraham

Nick_C wrote: »

That's not what HMRC say on their web site!!

"If you receive savings and investment income from abroad, you'll usually need to declare this on a Self Assessment tax return."

"Income counts as 'overseas income' if it comes from outside England, Scotland, Wales and Northern Ireland. So income from the Channel Islands and the Isle of Man counts as overseas income too.
Overseas savings and investment income includes ... dividends and interest from overseas companies"

http://www.hmrc.gov.uk/taxon/foreign.htm

If you have evidence to the contrary FA, please produce it.

It does say "usually", rather than "always", but I can't find any support for the £300 limit I quoted.

It sounds like those with a PAYE code and foreign income don't always need to do self-assessment (see http://www.hmrc.gov.uk/sa/need-tax-return.htm):

If you don't pay tax through a PAYE code you’ll need to complete a tax return if all of the following apply:

• you have income to declare, for example income from savings, trusts or abroad, rental income from land or property
• your total income exceeds your total allowances and reliefs
• you have tax to pay on this income

From which it doesn't logically follow that people with foriegn income upon which they don't need to pay tax don't need to submit a tax return. I know that we're not talking about tax returns, but self-assessment, but according to that page, the way to get a tax return is to register for self-assessment,



That page does say. however:


If you are an employee or a pensioner and already pay tax through a PAYE code, you can sometimes ask for tax that you owe on income, such as savings and property, to be collected through your code number. You'll need to complete a tax return instead if the income you receive is:

• £10,000 or more from taxed savings and investments
• £2,500 or more from untaxed savings and investments
• £10,000 or more from property (before deducting allowable expenses)
• £2,500 or more from property (after deducting allowable expenses)

So the limit might well be £2,500 for foreign income which hasn't been taxed by HMRC, as long as one pays tax via PAYE.


I declare my foreign dividends by a simple letter to HMRC (I am subject to PAYE), and in any case, HMRC is aware of them because I can reclaim part of the withholding tax levied by Germany from the German Federal Finance Office as long I send along a claim form which has been stamped by HMRC to say they are aware of my claim (so Germnay ensures that I'm not evading tax in UK before bringing the withholding tax down from 26.25% to 15%).


Warmest regards,
FA

FatherAbraham

Nick_C wrote: »

If you have evidence to the contrary FA, please produce it.

Ah, look, there in the midde of the page (www.hmrc.gov.uk/sa/need-tax-return.htm) it says:

You must complete a tax return if you have any foreign income that's liable to UK tax.

So foreign income which is liable to UK tax needs to be communicated via a tax return. Presumably foreign income such as dividends which has had tax withheld at 15% by a country with a double taxation-treaty with the UK (such as the USA or Germany) doesn't require a tax return for a basic-rate taxpayer (since UK tax on dividends is 10% in that case, so the 15% foreign tax accounts entirely for that liability), and therefore no self-assessment. (Of course, the income still needs to be declared).

Warmest regards,
FA

FatherAbraham

Nick_C wrote: »

If you have evidence to the contrary FA, please produce it.

Okay, now I know where the £300 limit comes from.

It's on the registration form https://online.hmrc.gov.uk/shortforms/form/SA1, which wants to know one's reason for needing to complete a tax return, and specifically asks for a confirmation to this statement:

I'm getting taxable foreign income of £300 or more

If you're under £300 of taxable foreign income, one can simply tell HMRC about it, without needing to do a full tax return.

I've also just confirmed this by speaking to the HMRC self-assessment helpline.

So -- ignore the other blather previously posted -- the limit is explicitly mentioned on the self-assessment registration form.

Warmest regards,
FA