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US expat wants to invest in US stocks

Financial discussion for any financial queries for Expats
tbr42
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US expat wants to invest in US stocks

#418342

Postby tbr42 » June 9th, 2021, 11:48 am

I am a dual US / UK citizen living in the British Isles who maintains a US address and still files US taxes. My unmarried partner is a British citizen. We have no plans to return to the US for the foreseeable future. My partner and I wish to invest in US stocks, but wish to do so in the most tax-advantageous and least complicated scenario possible (obviously!).

I see three options:
    Open a UK brokerage account in my partner’s name to invest in US stocks.
    Open a UK brokerage account in my name to do the same.
    Open a US brokerage account in my name to invest.

My own (ongoing) research has turned up quite a lot of information that is swimming around in my brain — FACTA, FEIE, US brokerages prohibiting expats from opening accounts, UK brokerages refusing to take on US expats, etc, etc, etc.

Can anyone suggest what they believe is the best method for investing in US stocks in our situation and why?

Or perhaps there’s a possibility we aren’t aware of yet.

Thank you.

gryffron
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Re: US expat wants to invest in US stocks

#418474

Postby gryffron » June 9th, 2021, 8:39 pm

Hi tbr42,
What you invest in doesn't really matter. Most brokers cover all major markets. It's finding a broker that is difficult in your situation.

As you have already discovered, onerous IRS rules mean most foreign brokers won't touch US citizens.

Time and again, Interactive Brokers come up as the truly international solution for expats. This link thinks so too. They have offices all over the world, and seem to understand the problems better than most. Whether you would be better opening an account at their US office or UK one I am unsure. As a US taxpayer I'd suspect the former. But I'm sure a quick phone call to them would help you decide.
UK: 0207-710-5695 http://www.interactivebrokers.co.uk
US: 1 (312) 542-6901 http://www.interactivebrokers.com

If your partner is not subject to US tax rules, then they can open a UK account anywhere. Even using an ISA or SIPP to save tax. But - think ahead - if you/they are likely to move country anytime, then locking yourself into UK tax rules can be pain, and using a flexible basic account at IB might be easier.

Gryff

DiamondEcho
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Re: US expat wants to invest in US stocks

#431590

Postby DiamondEcho » July 30th, 2021, 9:58 pm

gryffron wrote:If your partner is not subject to US tax rules, then they can open a UK account anywhere. Even using an ISA or SIPP to save tax. But - think ahead - if you/they are likely to move country anytime, then locking yourself into UK tax rules can be pain, and using a flexible basic account at IB might be easier. Gryff


Agree with all Gryffs post just on this point^. As a Brit open 'tax incentivised' a/c's such as ISA's/SIPPs before leaving the UK. You should be able to maintain them whilst you are expatting abroad but once abroad they are (IME) impossible to open.

Albert90
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Re: US expat wants to invest in US stocks

#467954

Postby Albert90 » December 22nd, 2021, 6:01 am

There is a myth in the US that you can invest in US stocks no matter where you live. If your company is listed on one of the major stock exchanges, such as NYSE or NASDAQ, then it's possible to buy and sell its shares online without having an address in the United States. However, there are some downsides:

* Most brokers charge higher transaction fees because they have to use a foreign custodian bank;

* You will need to file form W-8BEN with your broker;

* You may lose out on tax treaties between countries if your broker doesn't have footing in your country of residence. The US has tax treaties with nearly all developed nations, so this may not be a huge issue, but it's worth checking into.

* You may have difficulty getting timely information about your investments if they are traded on a US exchange. Major stock exchanges in the US close at 4pm EST, which can be midnight or later in other parts of the world.



If you're comfortable with these downsides, then investing in US stocks is a great way to diversify your portfolio and potentially increase returns. Just make sure to do your research first and talk to a broker who understands your situation. Happy trading!



Please note: This article is for informational purposes only and should not be construed as financial advice. Always consult with a qualified investment advisor before making any investment.

Kantwebefriends
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Re: US expat wants to invest in US stocks

#468137

Postby Kantwebefriends » December 22nd, 2021, 11:32 pm

If your partner invests in US shares within a Sipp then, subject to her completing the paperwork, the provider ought to be able to reclaim half of the US withholding tax on the dividends.

genou
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Re: US expat wants to invest in US stocks

#468364

Postby genou » December 24th, 2021, 1:59 pm

Kantwebefriends wrote:If your partner invests in US shares within a Sipp then, subject to her completing the paperwork, the provider ought to be able to reclaim half of the US withholding tax on the dividends.


If you have a decent SIPP administrator there is no US withholding on shares held in a UK SIPP.

Kantwebefriends
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Re: US expat wants to invest in US stocks

#468399

Postby Kantwebefriends » December 24th, 2021, 5:14 pm

genou wrote:If you have a decent SIPP administrator there is no US withholding on shares held in a UK SIPP.


Can you please name some who offer this service?

genou
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Re: US expat wants to invest in US stocks

#468559

Postby genou » December 26th, 2021, 1:06 pm

Kantwebefriends wrote:
genou wrote:If you have a decent SIPP administrator there is no US withholding on shares held in a UK SIPP.


Can you please name some who offer this service?

AJ Bell certainly do it.

Kantwebefriends
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Re: US expat wants to invest in US stocks

#468583

Postby Kantwebefriends » December 26th, 2021, 4:42 pm

genou wrote:
kantwebfriends wrote:Can you please name some who offer this service?

AJ Bell certainly do it.


Thank you.
Last edited by tjh290633 on December 26th, 2021, 7:08 pm, edited 1 time in total.
Reason: Attribution corrected - TJH


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