This page is for sharing ideas and experiences submitted by UKSA members on a wide range of subjects.
UKSA member Robert Aubrey has kindly shared with us his ideas on two topics below:
Purchase of overseas shares – December 2023
Here are some additional factors for UK residents to consider when purchasing shares in overseas companies.
- The prices of these shares and the value of their dividends will be affected by the foreign currency exchange rate.
- The value of the dividends will be reduced by “withholding tax”. A percentage of the dividend is retained by the tax authorities in the country in which the company is domiciled in. This may not be the country in which the company is listed in.
- To reduce the withholding tax payable on dividends of shares in companies domiciled in the “United States of America” (USA) or Canada it is necessary to complete a W-8BEN form which is valid for three years. In theory it is possible to claim some of the withholding tax payable on companies domiciled in countries which have a “Double taxation agreement” with the United Kingdom. In practice it is time consuming.
- When choosing a stockbroker or platform consider the charges for:
Foreign currency exchange,
Confirmation of dividend payment if required to claim a withholding tax rebate (this can vary from free to £50 per dividend). - There are advantages in holding such shares in a pension wrapper such as a “Self Select Personal Pension Plan” (SIPP). These are:
withholding tax treatment is more favourable for shares in pensions,
foreign currency can be held in pensions while in ISAs it must immediately be converted into sterling (GBP).
My view
Only consider this when you have a portfolio of shares in and experience of investing in your home market. Such as a selection of shares in the largest 350 companies listed on the main London Stock Market. This is known as the FTSE350.
Guidance on renewal of NSI certificates – December 2023
Those fortunate to have index linked National Savings Certificates may like to note that any renewed certificates cannot be withdrawn before the end of their term.
"National Savings & Investments" have not issued new Savings Certificates for many years. However is possible to renew existing certificates at the end of their term. About five years ago they imposed a "Significant Change" by replacing RPI with CPI. The change described above is listed under the same heading. So it is possible people will have missed it. Previous certificates could be withdrawn subject to penalties. The same may or may not apply to fixed rate National Savings Certificates.
