How do I trade US shares?
What is withholding tax?
How do we treat US income on UK listed shares?
Which international stock markets can I trade on?
What international charges do I pay?
What’s the difference between trading international shares and UK shares?
Why are there no live prices for international trades?
Why do I have to buy a quantity of shares for international trades?
How do we treat US income in a SIPP?
Before you can buy US shares, you need to complete a US tax form and return it to us. You may also benefit, depending on your circumstances, from a reduced rate of withholding tax on US sourced income (such as dividends).
We have a duty to the US tax authority for customers holding US shares and receiving income from the US. We must request and receive documents to comply.
When you complete a US tax form you may benefit from a reduced Withholding Tax rate. For example, you may be eligible for a reduced rate of 15% Withholding Tax on your US dividends, instead of the standard rate of 30%. This means that you may be able to receive $85 (net) from a gross U.S. dividend of $100, rather than the standard $70 (net).
When dividends, interest payments or some other types of corporate settlement are made by foreign corporations or governments, Withholding Tax will usually be deducted at the point of payment and paid to the government of the country initiating that payment. The amount of Withholding Tax deducted can differ from country to country and will affect the value of the returns.
If you receive foreign payments from trading international securities through us, the amount of Withholding Tax you have paid will appear on your consolidated tax certificate, which can be viewed online. If you are not registered online we post this certificate to you at the end of the tax year.
It is your responsibility to make sure you complete the right form. If you are completing a W-8BEN form, please refer to the ‘How to’ guide first. Further help can be found at www.irs.gov under ‘Forms & Instructions’.
A non-US individual such as a UK resident would ordinarily complete a W-8BEN:
Please note: The W-8BEN form is valid for three calendar years following the year in which you sign it, unless your personal circumstances change. Please let us know within 30 days if this happens. We will contact you when your form is due to expire.
For example, you would receive $70 on a $100 dividend.
A US person would ordinarily complete a W-9:
IMPORTANT: We can only accept completed forms from the email address you have registered with us.
There are two ways you can email the completed form to us:
Please email your completed form to StockbrokingUSTaxForm@lloydsbanking.com. We aim to log all forms within one working day and we’ll text you confirmation when it’s complete.
Please send your completed form to:
Customer Registration Department
Halifax Share Dealing
Lovell Park Road
The form we receive from you must be completed and signed in pen, and not a copy.
As well as UK shares you can also trade on six global stock markets with our range of trading accounts. International markets have different opening times from the London Stock Exchange, which allows you to trade shares from 8am until 9pm, Monday to Friday.
When you place an international order we will access the market directly through a third party trading provider and place your order onto the central market order book.
Your order will be routed to our international market counterparty who will trade it at a price at least equivalent to that available on the relevant international stock exchange or trading venue.
If you want to trade online on the New York Stock Exchange you’ll need to complete the NYSE Subscriber Agreement form and return this to:
Dealing Administration Department
Halifax Share Dealing
Lovell Park Road
|Stock Exchange||Local Times||UK Times|
|New York (NYSE, NASDAQ, NYSEAmex)||09:30 - 16:00||14:30 - 21:00|
|Frankfurt (XETRA)||09:00 - 17:30||08:00 - 16:30|
|Milan (MTA)||09:00 - 17:25||08:00 - 16:25|
|Paris (Euronext)||09:00 - 17:30||08:00 - 16:30|
|Amsterdam (Euronext)||09:00 - 17:30||08:00 - 16:30|
|Brussels (Euronext)||09:00 - 17:30||08:00 - 16:30|
During the change between Greenwich Mean Time and British Summer Time our opening hours may not match those of foreign markets.
With International shares you pay the same dealing commission as all other online trades. However, there is currency conversion fee. We take away 1.25% from the exchange rate for buys, and add 1.25% for sales. An indicative exchange rate will be shown prior to trading and the final rate will be shown once the trade is completed.
Please note: You can’t trade international shares within the Halifax ShareBuilder.
Below is an example of how the foreign exchange charge is calculated:
You buy 10 shares in a company valued at $100.00 per share. At the time the trade is placed, the £/$ exchange rate is 1.5200.
|Cost of shares - 10 x $100.00||$1,000.00|
|Cost of shares in GBP - $1,000.00/1.52||£657.89|
|FX rate with FX charge added (1.25%)||1.25% of 1.52 = 0.019
1.52 – 0.019 = 1.501
|Cost of shares in GBP including FX charge||$1,000/1.501=£666.22|
|FX cost: £666.22 - £657.89||£8.33|
The final figure shown within the above table as the FX cost will be the fee taken by us for the $1,000 international trade at an exchange rate of 1.5200.
When you invest in an international share you’re required to have an additional 10% of the total value of the trade (the total value is based on the estimated price) as a buffer to possible fluctuations in share price.
It’s worth noting that whilst you don’t need a 10% buffer in your account to sell international shares, you do need to understand that because of how the order book works you may not be able to sell your full order.
All international orders are placed on the order book and removed at the end of that working day –so if your order doesn’t go through or is only partially completed then you’d need to place a new order for the next trading day.
When you get a quote for a UK share we use automated systems to request quotes at the same time from all available market counterparties. Once we've received these quotes, we will automatically take the best price available and display this to you. Your order will be executed at the best price available.
When you trade UK shares there is also no 10% buffer, you’ll only need to cover the cost of your trade with the money in your share dealing account.
Because we get a quote instantly for you we will have the ability to use an ‘invest’ option which lets you trade up to the full amount of money held in your share dealing account rather than specifying a number of shares to buy.
International orders are dealt directly through the ‘order book’ at face value. Trading in this way allows us access to a much wider range of markets at a much lower cost, however this also means that a live quoting service is not available.
As international orders are placed directly on the relevant market's order book you will need to specify a quantity to trade and will not have ability to use an ‘invest’ option.
The Halifax Share Dealing Self Invested Personal Pension service is unable to arrange for US sourced income to be paid entirely exempt from tax in the US. Within our SIPP 30% Withholding Tax rate is applied to all US sourced dividends except where the shares are US listed and you’ve completed a W-8BEN form when 15% Withholding Tax will apply.
Please note, we don't currently offer a zero rate of Withholding Tax on US sourced dividends.
If you wish to buy US listed shares that pay US sourced dividends we require you to complete a W-8BEN form. Once we have this form we can apply a reduced 15% Withholding Tax rate.
For example, you would receive $85 on a $100 dividend. Other SIPP providers, depending on their arrangements, may pass on the full $100.
Ordinarily if you complete a W-8BEN form you will only pay the 15% Withholding Tax rate instead of 30% on US listed shares paying US sourced dividends. For UK listed shares paying US sourced dividends a 30% Withholding Tax rate is applied even if you have a W-8BEN form in place.
For example, you would receive $70 on a $100 dividend. Other SIPP providers, depending on their arrangements, may pass on the full $100.