Keeping record of purchased NYSE stocks

EdGasketTheSecond

Why don't you use an ISA, then you won't need to worry about tax.

MaxterMind

EdGasketTheSecond said:

Why don't you use an ISA, then you won't need to worry about tax.

https://www.moneysavingexpert.com/savings/stocks-shares-isas/
In relation to your suggestion, I had a look at the page I've linked to above.
It states: "Everyone in the UK over 18 has an annual £20,000 ISA allowance (for the 2020/21 tax year ending 5 April 2021). You can use all of this for a stocks & shares ISA if you want, or you can split it between stocks & shares".
So, if someone is investing under this £20,000 annual limit in the stock market (which would definitely be my case, well under it), then, is there any benefit to not doing this i.e. just purchasing through a broker direct?

bowlhead99

MaxterMind said

So, if someone is investing under this £20,000 annual limit in the stock market (which would definitely be my case, well under it), then, is there any benefit to not doing this i.e. just purchasing through a broker direct?

Some providers charge slightly more for an ISA-wrapped account than for a non-ISA account because there is more HMRC compliance work for them (e.g. ensuring the investments qualify to be held in an ISA, and reporting the annual subscribed amount and status to HMRC at the end of the year). However, many do not have extra fees - or the additional level of fee for annual account maintenance is somewhat nominal - so there may be little or nothing to be gained by shunning the ISA.

There are a few stocks that are not eligible to be held in ISAs, as the shares do need to trade on an HMRC recognised stock exchange;  e.g., some of the overseas equivalents of the AIM market don't qualify as recognised exchanges, and there are a few (e.g.) Chinese companies whose shares are listed on the US exchange by way of American Depositary Receipt but the underlying ordinary shares don't have their own listing on a recognised exchange, so the ADRs don't qualify even though you can buy them on NYSE.  But the vast majority of well-known shares and European-based funds would qualify.

MaxterMind

So if I were to open a stocks and shares ISA with a broker who is not a bank, and I chose my own stock on the FTSE, NYSE and the TSX, then since it is not a bank, is my ISA secure in the event that the broker were no longer opertional? That is, in the way that savers are guaranteed their savings under the relevant banking scheme (up to a certain amount) in the event that the savings bank was no longer operational.
For example, it appears to be possible to open an ISA stocks and shares account here (link below), and they are not a bank.
https://www.trading212.com/en/isa

bowlhead99

Most providers of investment ISAs are not banks, but are stockbrokers or investment platforms.    Whether it is a bank or a stockbroker running the investment ISA, the protection from FSCS to compensate you in case of failure is the same level (£85k) but it is a separate type of compensation from the compensation you would get on a cash savings account held by a bank.

With a bank account, the money belongs to the bank (although they owe it to you) so they can use it as part of their everyday business. Of course, if they go bust they may not be able to pay you back, so the financial services compensation scheme may be very useful.  Whereas with a broking account or investment ISA, the provider has to ring-fence your assets (the shares or investment funds you hold), and can't use them within their business, so arguably the protection is rather less likely to be needed.  Still, the protection in that case (investment) is a separate scheme from the protection FSCS offers on cash savings or current accounts (depositary), though it happens to have the same £85k limit.

If the broker / platform goes out of business, you still own your shares, but would need to wait for the administrators of the failed firm to identify your assets and transfer them to some other ISA manager who would take over the ongoing operation. In the case of SVS securities (https://forums.moneysavingexpert.com/discussion/6032496/svs-securities-shut-down/p1) this has taken over a year for investors to have their hands back on their own assets again.  However, in the case of that firm, the investor's pro-rata share of the costs of the administrators picking up the pieces has been borne by the FSCS.  With the amounts you are investing, it's highly unlikely that you could suffer so much loss due to fraud or failure of the broker that you would be looking to claim more than the £85k that's covered by FSCS - because you are only talking about investing thousands or tens of thousands rather than hundreds of thousands.

MaxterMind

Thank you bowlhead99 for the very detailed response. Very much appreciated.

MaxterMind

One thing which occurred to me, if someone wanted to select their own stock/shares in an ISA through a broker (eg Trading212) and found some of the stock which they wanted to purchase were not available through that broker, is it possible for that person to open a separate stocks and shares ISA with another broker who does have those other stock/shares available, provided the person remains under their annual ISA investment limit in total?

eskbanker

MaxterMind said:

One thing which occurred to me, if someone wanted to select their own stock/shares in an ISA through a broker (eg Trading212) and found some of the stock which they wanted to purchase were not available through that broker, is it possible for that person to open a separate stocks and shares ISA with another broker who does have those other stock/shares available, provided the person remains under their annual ISA investment limit in total?

No, you can't pay new money into two S&S ISAs in the same tax year.

MaxterMind

eskbanker said:

MaxterMind said:

One thing which occurred to me, if someone wanted to select their own stock/shares in an ISA through a broker (eg Trading212) and found some of the stock which they wanted to purchase were not available through that broker, is it possible for that person to open a separate stocks and shares ISA with another broker who does have those other stock/shares available, provided the person remains under their annual ISA investment limit in total?

No, you can't pay new money into two S&S ISAs in the same tax year.

With that being the case, it would be worth my while to determine in advance of opening a stocks & shares ISA which broker allows the purchase of the greatest number of the individual stocks I'd be interested in purchasing in advance of opening.

ColdIron

If you use one of the large established platforms the chance of them not having what you want to invest in is low. Does Trading 212 allow you to invest in funds (Unit Trusts/OEICs)?