Dealing in US Shares.

Picked up a question today from a viewer asking how and where do I deal in US shares? which I thought might be of wider interest.


Basically, I have an online dealing account alongside an online self select ISA. All box standard and run of the mill in terms of dealing and management charges. But, I generally try to use a dealer that has the facility to deal in foreign shares. For me this involves the US and Europe.
In the past I have tried E-Trade, Selftrade, and TD Waterhouse (Canadian parent), with TD Waterhouse probably having the most choice in US shares that can be dealt direct (if the shares can't be dealt with online then, in most cases, they can still  be dealt over the phone with the dealer.
However, first things first. Before you can deal in US shares you must request/download the form W8-BEN which "enables UK investors to claim exemption from paying US tax on dividends and interest from shares traded in the US, as such income will already fall under UK income tax rules". 
Once this has been completed, signed, and returned (plus a short time for your dealer to action), you should be ready to deal. 
Direct online dealing is executed in exactly the same way as for UK shares other than your funds are converted into the currency of the local market e.g. dollars. In my experience, it is also the case that your investment remains in the currency of the local market (e.g. dollars), until repatriated but, for valuation purposes, may be shown in your account as converted into sterling.
In general, my US investments have been bought  and held within my self select ISA with no complications.

A couple of things to note:

• due to timezones the US markets don't open for trade until approx. 2:45pm UK time. So any dealing requests prior to that will be sent to a dealer but can't be actioned until the market opens. This also means that you can continue to trade US shares into the evening UK time.
• the exchange rate is fluid so depending upon the rate when you deal you may increase/decrease your profit when you sell and repatriate your funds back into sterling. Alternatively, I believe that some brokers may provide a dollar dealing account which may mean that your sale funds could be left as dollars but this is not something I have used or have experience of.

I have also traded other markets with no problems e.g buying Tom Tom shares on the Amsterdam stock exchange. There are no additional forms to sign in this case (W8-BEN is only a requirement for US trading). 
However, I believe that there are other foreign markets whereby different tax implications apply but again I have not personally come across these.


Hope this helps.