Buying NASDAQ shares - very basic questions.

speedysloth

I'm wanting to buy specific shares in a company, listed on the NASDAQ exchange. I'm not looking to do any more than that, I'm not growing a portfolio, it's just a bit of 'buy-in' for a company we deal with through work. I understand I should only invest money I'd be prepared to lose. I'm not going to be selling and buying regularly, just buying in now and sitting on the stock. I have some savings doing nothing, so thought it would be something to take a punt on with part of them.
I set up a Halifax share dealing account, and just completing the W-8BEN form. 

Any tips or suggestions, or hazards to be aware of?

I have a 'share dealing account', and a 'stocks & shares ISA account'. 
For my circumstances as above, would one be better than the other? Sorry I'm aware I'm probably causing some serious eye-rolling amongst the financially informed among you, but not sure where to ask! I'm guessing that Halifax won't provide financial guidance on this...... 

Thanks for any pointers! 

MaxiRobriguez

Suggestions: Invest in a broad index tracker and do it regularly if you're not already. Investing is long term slow and steady.
Hazards: Potential to lose all your investment - depending on who the company is. Obviously if Apple for example that risk is practically zero.
Share dealing account/S+S ISA: Share dealing account has tax implications - both GCT and Dividend Tax. Depends on size of your investment whether you'll ever be at risk of triggering these.

speedysloth

MaxiRobriguez said:

Suggestions: Invest in a broad index tracker and do it regularly if you're not already. Investing is long term slow and steady.
Hazards: Potential to lose all your investment - depending on who the company is. Obviously if Apple for example that risk is practically zero.
Share dealing account/S+S ISA: Share dealing account has tax implications - both GCT and Dividend Tax. Depends on size of your investment whether you'll ever be at risk of triggering these.

Thanks! I'm only interested in one company though, I assume a broad index tracker would be a collection of companies???
Hazards - to lose all money - I'm OK to live with that risk, as I think it's low. The shares may go up or down but I'd be in it for the long term and can wait. 

Share dealing acct vs S&S ISA - I'd be looking at investing around $5k now potentially topping up to $10k value but would be over a longer period. Shares are currently ~$200 each. Not sure what triggers the risk on CGT or Dividend Tax?
Thanks!

MaxiRobriguez

speedysloth said:

MaxiRobriguez said:

Suggestions: Invest in a broad index tracker and do it regularly if you're not already. Investing is long term slow and steady.
Hazards: Potential to lose all your investment - depending on who the company is. Obviously if Apple for example that risk is practically zero.
Share dealing account/S+S ISA: Share dealing account has tax implications - both GCT and Dividend Tax. Depends on size of your investment whether you'll ever be at risk of triggering these.

Thanks! I'm only interested in one company though, I assume a broad index tracker would be a collection of companies???
Hazards - to lose all money - I'm OK to live with that risk, as I think it's low. The shares may go up or down but I'd be in it for the long term and can wait. 

Share dealing acct vs S&S ISA - I'd be looking at investing around $5k now potentially topping up to $10k value but would be over a longer period. Shares are currently ~$200 each. Not sure what triggers the risk on CGT or Dividend Tax?
Thanks!

You pay dividend tax on total dividends in a tax year being >£2,000. 

$15k of investment is about £10k worth, assuming currencies don't fluctuate that wildly over next few years then to breach dividend tax your company would need to pay a 20% yield this year, and still a very high yield even if the share price grows significantly. Seems unlikely you'll trigger this, but if you do you'd pay 7.5% or 32.5% (depending on if you're a basic rate or higher rate tax payer respectively) on all dividend earnings above £2k.

Capital gains are taxed on gains above £12,300 currently. So your £10k investment would need to more than double to trigger CGT. You'd pay this tax as a 10% or 20% rate (basic/higher again) on anything above the £12,300 figure. 

On the face of it it seems unlikely you'd trigger either. If your company does really well then perhaps you'd be liable for some CGT in the future, especially if it's a long term holding.

Equally though you have a ISA contribution allowance of £20k annually, so you can avoid any tax risk by buying within that wrapper.

george4064

Becareful of any compliance breaches, or of any potential conflicts of interest that may arise if you invest in the company’s stock.

Eco_Miser

speedysloth said:

Share dealing acct vs S&S ISA - I'd be looking at investing around $5k now potentially topping up to $10k value but would be over a longer period. Shares are currently ~$200 each. Not sure what triggers the risk on CGT or Dividend Tax?
Thanks!

Unless you have other  plans for your £20k ISA allowance this financial year, use the S&S ISA, that way you have no risk on CGT or Dividend tax.

speedysloth

george4064 said:

Becareful of any compliance breaches, or of any potential conflicts of interest that may arise if you invest in the company’s stock.

Oh ok. What would constitute a compliance breach, or conflict of interest? I have no special inside knowledge of their financial position, and am not an employee...... what do I need to consider for these possible issues mentioned? 

speedysloth

Thanks MaxiRobriguez and Eco_Miser, looks like the S+S ISA would be the best bet then. Thank you both! 

Thrugelmir

NASDAQ listed companies are not subject to the same level of regulatory scruntiny or reporting requirements as the premium segments of the US markets. You may also find yourself with a shareholding in an illiquid stock. Which may make selling the holding difficult in some circumstances. 

george4064

speedysloth said:

george4064 said:

Becareful of any compliance breaches, or of any potential conflicts of interest that may arise if you invest in the company’s stock.

Oh ok. What would constitute a compliance breach, or conflict of interest? I have no special inside knowledge of their financial position, and am not an employee...... what do I need to consider for these possible issues mentioned? 

You need to check your work contract and with your Compliance department. I don’t know what your working relationship is with this company, so only you can really tell if there may be a potential conflict of interest.