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  • FIRST POST
    • supraman
    • By supraman 13th Jun 19, 9:51 AM
    • 8Posts
    • 1Thanks
    supraman
    NASDAQ Shares (e.g. Tesla) in an ISA or Not?
    • #1
    • 13th Jun 19, 9:51 AM
    NASDAQ Shares (e.g. Tesla) in an ISA or Not? 13th Jun 19 at 9:51 AM
    I'd like to buy some Tesla shares (NASDAQ: TSLA) to take advantage of the recent price drop. It is my intention to invest between £5,000 and £20,000.

    I believe that it is possible to hold NASDAQ shares within an ISA, but I read somewhere that it might not make sense to do so due to the charges associated with currency conversion.

    Are there any share trading platforms that would allow me to add/hold/remove funds as USD (allowing me to have control of the currency conversion), buy shares in Tesla and still benefit from an ISA wrapper?

    If no such platform exists, then am I correct in saying that I have two options?:

    1. Use a platform that supports NASDAQ shares within an ISA and just accept the currency conversion charges.
    2. Use a platform that allows me to hold USD, but forgo the benefits of an ISA.

    Can anybody suggest low-fee platforms for either option? Which (Option 1) platform has the lowest fees for currency conversion?

    Should I even consider Option 2? My gut feeling is that a 1% (see below) currency conversion fee is a small price to pay for protection from Capital Gains Tax (CGT), but I'm not sure how to do a proper comparison.

    I've had a couple of conversations with very helpful staff at Hargreaves Lansdown. They can help me with Option 1, and the fees would be:

    Dealing Commission £11.95 per trade (maximum, but can reduce based on number of trades in previous month)
    Currency Conversion Fee
    First £5,000 1.00%
    Next £5,000 0.75%
    Next £10,000 0.5%
    Over £20,000 0.25%
    ISA Annual Fee 0.45% (capped at £45)

    If I understood their explanation correctly, the currency conversion fee would also apply to any dividends at the point of payment. However, if the dividends are subsequently reinvested then the fee is waived so at least I wouldn't be double-charged.

    I got the impression that the seemingly unnecessary dividend conversion from USD to GBP and back might be a limitation of the Hargreaves Lansdown platform and that other ISA platforms might be able to avoid the conversion fee by leaving the dividends in USD until reinvestment. However, it's possible that HMRC insists that the dividends are converted to GBP in all ISAs. I don't have a definitive answer on that yet.

    I'm not currently considering Hargreaves Lansdown for Option 2 because even their non-ISA Fund and Share Account does not support the holding of USD.

    So, should I just set up a Hargreaves Lansdown ISA, or is there a better alternative? I look forward to hearing your thoughts.
Page 1
    • AnotherJoe
    • By AnotherJoe 13th Jun 19, 10:05 AM
    • 15,967 Posts
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    AnotherJoe
    • #2
    • 13th Jun 19, 10:05 AM
    • #2
    • 13th Jun 19, 10:05 AM
    Currency conversion is only really an issue if you intend to buy and sell frequently. Otherwise for long term holds I wouldnt worry about it.

    Interactive Investor (ii) do a trading account which lets you hold various currencies and then trade within those so once youve taken the currency hit you can buy and sell US shares (or Euro) and remain within that currency. Not sure if you can do that within their ISA. I have a feeling not.

    However, I've just transferred my US holdings out of ii to HL on account of ii's new fee structure, since its free to hold shares with HL* and my US shares are long term.
    Do Tesla pay dividends???






    * my account with HL for these shares is unwrapped
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Voyager2002
    • By Voyager2002 13th Jun 19, 11:14 AM
    • 13,311 Posts
    • 9,167 Thanks
    Voyager2002
    • #3
    • 13th Jun 19, 11:14 AM
    • #3
    • 13th Jun 19, 11:14 AM
    Interactive Investor (ii) do a trading account which lets you hold various currencies and then trade within those so once youve taken the currency hit you can buy and sell US shares (or Euro) and remain within that currency. Not sure if you can do that within their ISA. I have a feeling not.
    Originally posted by AnotherJoe

    I hold both an ISA and trading account with II: the ISA does not allow you to hold foreign currency.

    An account with Fineco offers probably the most cost-effective way to hold these shares in an unwrapped account (they do not offer an ISA). With Fineco there is no fee for currency conversion at something very close to the mid-market rate, and no fee for holding investments.
    • Voyager2002
    • By Voyager2002 13th Jun 19, 11:16 AM
    • 13,311 Posts
    • 9,167 Thanks
    Voyager2002
    • #4
    • 13th Jun 19, 11:16 AM
    • #4
    • 13th Jun 19, 11:16 AM
    You could also look for ETFs or Investment Trusts that include the shares you want and are quoted and traded in sterling. For instance, I know there is an ETF that tracks the NASDAQ.
    • MaxiRobriguez
    • By MaxiRobriguez 13th Jun 19, 11:44 AM
    • 507 Posts
    • 361 Thanks
    MaxiRobriguez
    • #5
    • 13th Jun 19, 11:44 AM
    • #5
    • 13th Jun 19, 11:44 AM
    You could also look for ETFs or Investment Trusts that include the shares you want and are quoted and traded in sterling. For instance, I know there is an ETF that tracks the NASDAQ.
    Originally posted by Voyager2002
    Would deviate from OP's intention to buy Tesla though as the allocation to Tesla would be minimal.

    Personally I'd avoid Tesla like the plague but if OP specifically wants to buy Tesla then a Nasdaq ETF isn't appropriate.
    • LobsterMemory
    • By LobsterMemory 13th Jun 19, 11:44 AM
    • 246 Posts
    • 184 Thanks
    LobsterMemory
    • #6
    • 13th Jun 19, 11:44 AM
    • #6
    • 13th Jun 19, 11:44 AM
    From Tesla's Investor Relations FAQs

    Does Tesla pay a dividend? Does it plan to?

    Tesla has never declared dividends on our common stock. We intend on retaining all future earnings to finance future growth and therefore, do not anticipate paying any cash dividends in the foreseeable future.


    Solves that problem
    • george4064
    • By george4064 13th Jun 19, 1:10 PM
    • 1,312 Posts
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    george4064
    • #7
    • 13th Jun 19, 1:10 PM
    • #7
    • 13th Jun 19, 1:10 PM
    I hold both an ISA and trading account with II: the ISA does not allow you to hold foreign currency.

    An account with Fineco offers probably the most cost-effective way to hold these shares in an unwrapped account (they do not offer an ISA). With Fineco there is no fee for currency conversion at something very close to the mid-market rate, and no fee for holding investments.
    Originally posted by Voyager2002
    It's against HMRC rules to hold any currency other than GBP Sterling in an ISA.
    Last edited by george4064; 14-06-2019 at 8:58 AM.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2017 - #003 £12,427.51 (104%)
    Save £12k in 2018 - #004 £9,165.94 (46%)
    Save £12k in 2019 - #007 £11,332.36 (94%)
    • katsu
    • By katsu 13th Jun 19, 1:37 PM
    • 4,546 Posts
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    katsu
    • #8
    • 13th Jun 19, 1:37 PM
    • #8
    • 13th Jun 19, 1:37 PM
    I purchased NASDAQ USD shares into a S&S ISA via AJ Bell a few years ago.
    Debt at highest: £8k Debt Free 31/12/2009 (nine years and counting ) Original MFD: May 2036. MF Dec 2018
    • horace972897
    • By horace972897 14th Jun 19, 8:36 AM
    • 80 Posts
    • 40 Thanks
    horace972897
    • #9
    • 14th Jun 19, 8:36 AM
    • #9
    • 14th Jun 19, 8:36 AM
    ii do allow you to hold non sterling in SIPP's - just not ISA's
    • bowlhead99
    • By bowlhead99 14th Jun 19, 8:55 AM
    • 9,359 Posts
    • 17,019 Thanks
    bowlhead99
    Its against HMRC rules to hold any currency other than GBP Sterling in an ISA or SIPP, II's foreign currency service is only available to standard unwrapped accounts.
    Originally posted by george4064
    It's not against HMRC rules to have currency balances in a pension. Only ISAs -which are more restrictive in their list of permitted investments - have that limitation.

    II do offer multi currency accounts for their sipp product, https://www.ii.co.uk/investing-with-ii/international-investing
    • george4064
    • By george4064 14th Jun 19, 8:58 AM
    • 1,312 Posts
    • 1,300 Thanks
    george4064
    It's not against HMRC rules to have currency balances in a pension. Only ISAs -which are more restrictive in their list of permitted investments - have that limitation.

    II do offer multi currency accounts for their sipp product, https://www.ii.co.uk/investing-with-ii/international-investing
    Originally posted by bowlhead99
    ii do allow you to hold non sterling in SIPP's - just not ISA's
    Originally posted by horace972897
    My apologies, I stand corrected! Thanks for pointing that out.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2017 - #003 £12,427.51 (104%)
    Save £12k in 2018 - #004 £9,165.94 (46%)
    Save £12k in 2019 - #007 £11,332.36 (94%)
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