Investing in UK shares

[happydays]

Is it possible to trade UK shares without a UK address? I do have a UK bank account.

Thanks.

[NVass]

Yes it is. Just setup a trading account with an online broker like Swissbank but there are plenty of others. It takes a week or two then my first deposit had to come from my UK acount but after that its up to you.

Edited March 4, 2021 by NVass

[toolpush]

Be aware that certain brokerages will let you trade shares on the main board but not on the AIM. I signed up with a brokerage with the aim of trading on the AIM (pun intended), but after signing up, I found out I could only trade on the main board and not the AIM. Very frustrating.

[peterpop]

About 2 years ago the UK gov made all holders of UK stock broking accounts have a UK Bank and address.  I use DeGiro and my Thai address and UK Bank.  This was OK 7 years ago but now they will not take on new clients unless UK based.  DeGiro gives a poor AIM service.

So you have to find an international broker who deals on the London market and many do.  I think Interactive Investors may be good.  Charles Scwab in the USA is good but signing up is hard.  Some Thai Banks claim to do a service, yes, but no one in their right mind would use it.  You have raised a problem area in investing.  It seems to be more difficult all the time for the likes of us.

Edited March 4, 2021 by peterpop
Incomplete

[oznomad]

Yes.

You can trade using a broker that has access to the particular market you want to play in.

The broker can be anywhere.

Check which markets they access (and their fees) before signing up.

[Andycoops]

I transferred shares into my brother's name and he buys and sells on my behalf using his UK address.

Not practical for constant trading but suits me as I only trade occasionally.

[Mario666]

On 3/3/2021 at 8:31 AM, happydays said:

Is it possible to trade UK shares without a UK address? I do have a UK bank account.

Thanks.

 

I use my brother's UK address as my Banking address...If you can set up a similar arrangement with a friend or relative then open a Hargreaves Lansdown Trading Account....All trading and correspondence is then done online!

 

It's very easy and quick and their fees are minimal.

 

Hargreaves Lansdown | ISAs, pensions, funds and shares (hl.co.uk)

 

Good Luck!

[treetops]

4 hours ago, Mario666 said:

It's very easy and quick and their fees are minimal.

 

You've got to do a lot of transactions for their share dealing fees to be competitive.

 

 

https://www.hl.co.uk/shares/share-dealing/dealing-charges

 

I use x-o.co.uk which may not be as user friendly but charges £5.95 per transaction IIRC.  Not sure about the address query from the  OP.

[Fairynuff]

On 3/5/2021 at 4:16 PM, treetops said:

 

You've got to do a lot of transactions for their share dealing fees to be competitive.

 

 

https://www.hl.co.uk/shares/share-dealing/dealing-charges

 

I use x-o.co.uk which may not be as user friendly but charges £5.95 per transaction IIRC.  Not sure about the address query from the  OP.

Is there an upper limit on the value of a trade?

[Surelynot]

I ran into this problem living in Germany, even though I was a "servant of the crown"......I registered a credit and debit card to the address of a relative and used that as proof to open an account with HL.....no problems to date.

[treetops]

2 hours ago, Fairynuff said:

Is there an upper limit on the value of a trade?

 

I've no idea.  I've only ever played with "fun" money.

[CRUNCHER]

Try HSBC Invest Direct International.

[Surelynot]

2 hours ago, Fairynuff said:

Is there an upper limit on the value of a trade?

Not as far as I am aware......more trades will bring down the price of a trade....but stamp duty is the killer.

 

Unless you are trading in lots bigger than say £10,000 it is hardly worth trading......stick your money in a big fund, cross your fingers and forget about it for 30 years.

[realfunster]

To answer the OP - 100% yes.

Can register with an international brokerage quite easily with a Thai address. I use IBKR, but there are others of course. 

This gives me full access to pretty much all global markets and ETFs. Something like e-toro is also easy to sign up to as a more informal platform. 

In fact, trading whilst being registered as non-UK tax resident (as long as this is true!) has it's advantages on avoiding/reducing taxes on capital gains and dividends.

[topt]

On 3/12/2021 at 1:02 PM, realfunster said:

on avoiding/reducing taxes on capital gains

Please correct me if wrong but I understood if non resident for tax you are not liable for capital gains - apart from property.

[realfunster]

On 3/15/2021 at 7:27 PM, topt said:

Please correct me if wrong but I understood if non resident for tax you are not liable for capital gains - apart from property.

I believe that’s correct. My full comment was referring to capital gains & dividends.

AFAIK - the first are avoided as a non-resident and the latter reduced to only a deemed 10% tax at source, I am not 100% clear on this but it also appears to essentially be tax free. 

[dginoob]

23 hours ago, realfunster said:

I believe that’s correct. My full comment was referring to capital gains & dividends.

AFAIK - the first are avoided as a non-resident and the latter reduced to only a deemed 10% tax at source, I am not 100% clear on this but it also appears to essentially be tax free. 

I'm a UK citizen, but non-resident (I live and work here), though I do have a small salary in the UK on which I pay no tax but I do pay national insurance. 

I've never invested before but I am in a position now where I really need to think about retirement and investing for that.

My initial idea was to open an investment ISA with Vanguard and put my current savings and salary going forward into one of their Life Strategy funds, but I found that it's not possible if I do not live in the UK. So I am trying to find out what my options are and what the best solutions are tax wise. 

Would you have any advice you could share?

[realfunster]

On 3/19/2021 at 1:37 PM, dginoob said:

I'm a UK citizen, but non-resident (I live and work here), though I do have a small salary in the UK on which I pay no tax but I do pay national insurance. 

I've never invested before but I am in a position now where I really need to think about retirement and investing for that.

My initial idea was to open an investment ISA with Vanguard and put my current savings and salary going forward into one of their Life Strategy funds, but I found that it's not possible if I do not live in the UK. So I am trying to find out what my options are and what the best solutions are tax wise. 

Would you have any advice you could share?

 

Hello - can’t profess to be an expert as I only started taking a more active interest in my investing last year, so cannot give financial advice but provide a few comments below :

- Investing in the Thai market sucks. UK is ‘OK’ and has friendly tax rules as a non-resident but I feel you really need to be in the US to be able to achieve a long-term 10%+ per year.

- Use Thai tax saving schemes, if it make sense to your circumstances and plans e.g SSF/RMF & company Provident Fund. These used to be restricted to Thai SET (been poor return for 5 years) but now you can make international investments as well. 

- There are increasingly more local general options to invest in overseas markets, although the management fees are still high compared to the likes of Vanguard plus you have to accept some FOREX risk.

- I opened a brokerage account as a Thai-based expat/UK citizen with IBKR (other options exist) it was very easy to do. This gives me direct access to global stocks & ETFs. Don’t think there is a THB option, so you will need to fund via GBP/EUR/USD and bank transfers from Thailand. 

- I can’t access Vanguard Life Strategy funds via IBKR but can access all their ETFs, pretty straightforward to make your own ‘Life Strategy’ fund using a handful of their ETFs. E.g S&P500 40%/Europe 10%/Japan 10%/Emerging Markets 10%/Bonds 30%.

 

Youtube channel Pensioncraft is a good place to start and has some reviews of various investing strategies and funds available. 

 

 

[dginoob]

On 3/21/2021 at 10:44 PM, realfunster said:

 

Hello - can’t profess to be an expert as I only started taking a more active interest in my investing last year, so cannot give financial advice but provide a few comments below :

- Investing in the Thai market sucks. UK is ‘OK’ and has friendly tax rules as a non-resident but I feel you really need to be in the US to be able to achieve a long-term 10%+ per year.

- Use Thai tax saving schemes, if it make sense to your circumstances and plans e.g SSF/RMF & company Provident Fund. These used to be restricted to Thai SET (been poor return for 5 years) but now you can make international investments as well. 

- There are increasingly more local general options to invest in overseas markets, although the management fees are still high compared to the likes of Vanguard plus you have to accept some FOREX risk.

- I opened a brokerage account as a Thai-based expat/UK citizen with IBKR (other options exist) it was very easy to do. This gives me direct access to global stocks & ETFs. Don’t think there is a THB option, so you will need to fund via GBP/EUR/USD and bank transfers from Thailand. 

- I can’t access Vanguard Life Strategy funds via IBKR but can access all their ETFs, pretty straightforward to make your own ‘Life Strategy’ fund using a handful of their ETFs. E.g S&P500 40%/Europe 10%/Japan 10%/Emerging Markets 10%/Bonds 30%.

 

Youtube channel Pensioncraft is a good place to start and has some reviews of various investing strategies and funds available. 

 

 

Thanks for the info. I think what I will do is try to open a Vanguard investment ISA using my mothers address and see how that goes. If that's doesn't work then I'll open a brokerage account as you have done. What are the tax implications for any gains you make on your account?

Good recommendation on Pensioncraft. I am already subscribed to his YouTube channel and newsletter. Have even considered booking a "power hour" with him.

Thanks again,

 

[AlexRich]

On 3/8/2021 at 5:46 AM, Fairynuff said:

Is there an upper limit on the value of a trade?

Depends on the market capitalisation of the company and the level of liquidity (number and volumes of buyers and sellers). You could easily buy £30,000 of shares in Glaxosmithkline on one transaction, but might struggle to buy £1,000 of a small AIM share, and with them the buying margin is likely to be high (difference between buy and sell price). So, it depends.

[AlexRich]

On 3/19/2021 at 8:37 AM, dginoob said:

I'm a UK citizen, but non-resident (I live and work here), though I do have a small salary in the UK on which I pay no tax but I do pay national insurance. 

I've never invested before but I am in a position now where I really need to think about retirement and investing for that.

My initial idea was to open an investment ISA with Vanguard and put my current savings and salary going forward into one of their Life Strategy funds, but I found that it's not possible if I do not live in the UK. So I am trying to find out what my options are and what the best solutions are tax wise. 

Would you have any advice you could share?

You could set up a brokerage account outside the UK, as you are no longer a UK resident for tax purposes. That means that any capital gains or dividend income is not subjected to UK tax. There are many brokerages ... for example Swissquote, based in Luxembourg, offer access to the UK market, the US market, Hong Kong, Singapore and many European bourses. Best begin with what you know ... the UK ... a good time as it is one of the cheapest markets at the moment. You have to be careful moving money to Thailand. Only transfer profits made in the previous tax year, as moving in money earned in the current tax year is technically subject to tax. Good luck.

[dginoob]

On 3/23/2021 at 1:45 PM, AlexRich said:

You could set up a brokerage account outside the UK, as you are no longer a UK resident for tax purposes. That means that any capital gains or dividend income is not subjected to UK tax. There are many brokerages ... for example Swissquote, based in Luxembourg, offer access to the UK market, the US market, Hong Kong, Singapore and many European bourses. Best begin with what you know ... the UK ... a good time as it is one of the cheapest markets at the moment. You have to be careful moving money to Thailand. Only transfer profits made in the previous tax year, as moving in money earned in the current tax year is technically subject to tax. Good luck.

Capital gains or dividend income will not be subjected to UK tax, but will it be subject to Thai tax?

[AlexRich]

12 hours ago, dginoob said:

Capital gains or dividend income will not be subjected to UK tax, but will it be subject to Thai tax?

No, if you are careful. The Thai tax year runs from 1 Jan until 31 Dec I believe (if I’m wrong someone will post). 
 

The important thing to understand is that if you bring profits from gains or dividend income into Thailand in the same tax year as they were earned, you are technically subject to Thai tax. So a dividend received in September 2020 can be brought into Thailand in January 2021 without incurring a tax liability. If you bring it in December 2020 it’s taxable.

 

I’m pretty sure that’s correct, but if I’m wrong someone will post. 

[dginoob]

8 hours ago, AlexRich said:

No, if you are careful. The Thai tax year runs from 1 Jan until 31 Dec I believe (if I’m wrong someone will post). 
 

The important thing to understand is that if you bring profits from gains or dividend income into Thailand in the same tax year as they were earned, you are technically subject to Thai tax. So a dividend received in September 2020 can be brought into Thailand in January 2021 without incurring a tax liability. If you bring it in December 2020 it’s taxable.

 

I’m pretty sure that’s correct, but if I’m wrong someone will post. 

 

Thanks, that's really useful to know!

[partington]

On 3/23/2021 at 6:45 AM, AlexRich said:

You could set up a brokerage account outside the UK, as you are no longer a UK resident for tax purposes. That means that any capital gains or dividend income is not subjected to UK tax. 

Just need to point out that this is only completely true of dividends/interest from non-UK domiciled investments, which are not taxable at all by the UK.

 

Dividends or interest arising from UK companies or banks,  or from any fund or ETF that is domiciled in the UK, are only completely non-taxable if you do not need to use your personal allowance - currently around £12,570 - to offset other kinds of UK income, such as rent from a UK property.

 

If you have no UK  income other than the UK-arising interest /dividends then this is indeed non- taxable (this is referred to as "disregarded income" by HMRC). 

 

If, though, you also had £12,570 income in the UK from other sources, like rental from a house, you would have to either choose to use your personal allowance to offset  tax on that £12,570, and pay tax on UK-arising dividends/ interest OR not pay tax on UK-arising dividends and interest, and pay tax on the £12,570 other income. 

 

Personal circumstance and the  balance between the exact amounts  of UK-arising dividend/interest  income and other kinds of UK income will determine which choice results in least tax.

 

If the  total of both your UK-arising non-dividend/interest and dividend /interest income is less than £12,570 this is still all offset by using your allowance so the question doesn't arise.

 

This is explained on UK HMRC site here: https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2017

Edited March 26, 2021 by partington

[AlexRich]

On 3/26/2021 at 3:10 PM, partington said:

Just need to point out that this is only completely true of dividends/interest from non-UK domiciled investments, which are not taxable at all by the UK.

 

Dividends or interest arising from UK companies or banks,  or from any fund or ETF that is domiciled in the UK, are only completely non-taxable if you do not need to use your personal allowance - currently around £12,570 - to offset other kinds of UK income, such as rent from a UK property.

 

If you have no UK  income other than the UK-arising interest /dividends then this is indeed non- taxable (this is referred to as "disregarded income" by HMRC). 

 

If, though, you also had £12,570 income in the UK from other sources, like rental from a house, you would have to either choose to use your personal allowance to offset  tax on that £12,570, and pay tax on UK-arising dividends/ interest OR not pay tax on UK-arising dividends and interest, and pay tax on the £12,570 other income. 

 

Personal circumstance and the  balance between the exact amounts  of UK-arising dividend/interest  income and other kinds of UK income will determine which choice results in least tax.

 

If the  total of both your UK-arising non-dividend/interest and dividend /interest income is less than £12,570 this is still all offset by using your allowance so the question doesn't arise.

 

This is explained on UK HMRC site here: https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2017

My suggestion was that he set up a brokerage account outside of the UK, say Luxembourg or Switzerland. The only brokerage account that he can have in the UK that’s tax free is a stocks and shares ISA. The issue with that is that you cannot top it up with £20k every year once you become non resident for tax purposes.  It is effectively frozen, but you can still grow it if you invest successfully. This would have to have been up and running before he leaves the UK.

 

But if he is based in Thailand and he is using an offshore brokerage to buy UK shares then any gains or dividend income is not subject to UK taxation. The personal allowance in this situation becomes irrelevant. It would only be relevant if he was buying UK shares using a broker situated in the UK. And as I stated, the advice is to set up an offshore brokerage.

 

Of course any assets based in the UK that generate an income or gain are potentially subject to UK tax, with the exception of a tax sheltered product like an ISA. So if he rents an apartment then tax applies. But I don’t think that this is the case for the OP?

 

The other thing to add is be careful about visits to the UK. If you return to the UK and stay too long you become resident for tax purposes. And if you return to the UK within 5 tax years then any gains and income earned during your period overseas is liable for tax, unless it’s a contract for employment for at least 12 months. This area is complex so you need to think carefully and seek advice if you are returning to the UK or visiting more than 30 days in a tax year. 

 

 

 

 

[partington]

4 hours ago, AlexRich said:

 

 

But if he is based in Thailand and he is using an offshore brokerage to buy UK shares then any gains or dividend income is not subject to UK taxation. The personal allowance in this situation becomes irrelevant. It would only be relevant if he was buying UK shares using a broker situated in the UK. And as I stated, the advice is to set up an offshore brokerage.

 

Well this is the point where I am doubtful.  I think that the taxation is incurred because of the place where the income arises and not the place where it is paid, so the location of the brokerage is not relevant.

 

(This is a separate issue as to whether this payment would ever become known to the UK tax authorities, although with CRS agreements it might.)

 

For example if you are a UK non-resident and you have a UK brokerage account, (say opened before you became non-resident), then foreign dividends owned through and paid directly into this UK brokerage are not taxable, even thought the brokerage is onshore in the UK, and the income is paid into the UK.

 

I can't see then why dividend payments arising in the UK, owned through and paid directly to an offshore brokerage, would not be taxable as UK arising income irrespective of where they are paid.

 

There isn't any indication  on the HMRC page that the dividends from UK companies are treated differently according to where the shares are held, or where the dividends are paid? I'm not an expert though.

 

EDIT however I did find this exchange on Money saving expert site:

https://forums.moneysavingexpert.com/discussion/6003086/degiro-vs-foreign-income

 

anigys wrote: »

I have a brokerage account in DeGiro (what is a Dutch company, I think). There, I have a number of ETFs, domiciled in the UK, Ireland and the US. I wonder how the income from the dividends of these ETFs is considered regarding being "foreign" (there, eg. is a separate personal allowance for foreign dividends).

There isn't a separate personal allowance for foreign dividends vs UK dividends, unless you mean that you are a UK resident but non-UK-domiciled individual and you are hoping to use the 'remittance' basis of taxation.

I thought the UK and Ireland are considered "UK dividends" and the US ones "foreign". Is this correct,

The UK ones are considered UK dividends, and the Irish ones and US ones are both considered "foreign" dividends because they are not "UK" dividends.

or, eg., are all dividend in DeGiro foreign because it's a Dutch broker?

The fact that the broker is overseas doesn't change whether the dividends you earn are from a foreign entity (e.g. Ireland, US, Luxembourg etc) or from a UK entity.

Edited March 27, 2021 by partington

[AlexRich]

Sorry, you’ve lost me? If a UK citizen is non-resident for tax purposes then any gains or income earned overseas is not subject to UK tax. So if I buy UK shares through an offshore account (and comply with the residency rules) any dividends or capital gains are not taxable in the UK. It doesn’t matter that the companies are listed on the London market. I don’t believe that situation is true if you buy UK shares through a UK broker, otherwise there would be no need for offshore brokerages? 
 

So if the guy who asked the question does this he will be okay.

 

 

 

[partington]

15 hours ago, AlexRich said:

Sorry, you’ve lost me? If a UK citizen is non-resident for tax purposes then any gains or income earned overseas is not subject to UK tax.

 

 

 

The point is the dividend gains or income from UK company shares held in an offshore brokerage are NOT "earned overseas" in the site of the brokerage, they are earned in the UK , despite where they are held and paid.

 

In just the same way the dividend gains  or income from a Luxembourg company shares held in a UK brokerage are earned in Luxembourg, despite where they are held and paid.

 

I interpreted this statement from above quote as supporting this conclusion:

 

The fact that the broker is overseas doesn't change whether the dividends you earn are from a foreign entity (e.g. Ireland, US, Luxembourg etc) or from a UK entity

Edited March 28, 2021 by partington

[AlexRich]

1 hour ago, partington said:

The point is the dividend gains or income from UK company shares held in an offshore brokerage are NOT "earned overseas" in the site of the brokerage, they are earned in the UK , despite where they are held and paid.

 

In just the same way the dividend gains  or income from a Luxembourg company shares held in a UK brokerage are earned in Luxembourg, despite where they are held and paid.

 

I interpreted this statement from above quote as supporting this conclusion:

 

The fact that the broker is overseas doesn't change whether the dividends you earn are from a foreign entity (e.g. Ireland, US, Luxembourg etc) or from a UK entity

Sorry, you’re guessing that is true, but you are wrong. Rio Tinto is listed in London, as is Gem Diamonds, and both generate profits outside the UK, as do many others. My original point, and advice to the guy who asked, is correct. If you are a British citizen permanently resident in Thailand and purchase UK shares through an offshore brokerage, neither the dividends nor the capital gains will be subject to UK tax. It is only subject to Thai tax under limited circumstances, which can be avoided by holding the gains/dividends offshore and only transferring to Thailand in the next or future tax year. 
 

You are free to doubt that this is true, but you’d be wrong to.