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UK Sharedealing accounts for non-residents

Financial discussion for any financial queries for Expats
samuzza
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UK Sharedealing accounts for non-residents

#251263

Postby samuzza » September 12th, 2019, 4:47 am

I know this topic has been raised a few time, so forgive me if my questions have already been answered in a previous thread (I did have a good look around).

Backstory: my UK-based online broker went into special administration last month (August 2019). So, since finding out, I've been trying to find another UK-based online, execution only, broker. But I'm working abroad, in Asia, and every broker refuses to open an account for me - except one broker whose fees are just silly.

On a previous lemon fool thread some posters suggested not telling the broker where I live, which I could do because I'm a British citizen, have a UK address, UK bank account, and NI number. One of my colleagues does the same thing.

My question is, how good of an idea is this? What's the worst that could happen by fibbing in this way?

My investment strategy is pretty simple - I'm just investing once or twice a month (about £12k+/year) in a low-cost Vanguard ETF for my retirement. My main aim is to keep things simple and low-cost.

Cheers in advance for any advice guys and gals.

dspp
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Re: UK Sharedealing accounts for non-residents

#251310

Postby dspp » September 12th, 2019, 10:06 am

You could try having a holiday or a business visit to the UK, even taking in your own home.

File your broker papers during that visit. That way you could cross your fingers behind your back slightly less when you sign that you are living in the UK. After all you are, for a few days at least.

The reality is that for anybody other than the super rich things international are getting a lot more difficult these days.

[edit] You might also want to enquire of Charles Stanley (https://www.charles-stanley.co.uk/). They were once my broker when I was overseas. Pricy but good service.

regards, dspp

EssDeeAitch
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Re: UK Sharedealing accounts for non-residents

#251322

Postby EssDeeAitch » September 12th, 2019, 10:33 am

samuzza wrote:On a previous lemon fool thread some posters suggested not telling the broker where I live, which I could do because I'm a British citizen, have a UK address, UK bank account, and NI number. One of my colleagues does the same thing.

My question is, how good of an idea is this? What's the worst that could happen by fibbing in this way?



I know for certainty that to open a trading account on Vanguard (online, no phone conversations required) you will need the information you list above as well as provide one document from each of the lists below. There are no questions to answer as to where you spend most of your time or where you pay income tax etc. I am not suggesting that you are eligible to open an account with Vanguard, merely stating what their requirements are. And I would never suggest that fibbing or lying is a good idea. I would imagine that ISA and SIPP accounts have different/additional requirements.

If you complete the online form without submitting any documents, they will prompt you via a secure message to upload them.

List A – to verify your identity:
Valid passport
Valid Full UK photocard driving licence
EEA National Identity card Firearms certificate or shotgun licence

List B – to verify your address:
Valid Full UK photocard driving licence, if not already used from List A
Current bank or credit card statement (showing your address) dated within the last 3 months
UK utility bill (gas, electricity etc.) dated within the last 3 months
Document from FCA regulated product provider dated within the last 3 months
HMRC correspondence detailing name, address and permanent National Insurance number dated within the last 3 months
UK council tax bill - must be the most recent issued document and dated within the last 12 months

samuzza
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Re: UK Sharedealing accounts for non-residents

#251386

Postby samuzza » September 12th, 2019, 2:40 pm

Cheers for the comments.

I did phone Charles Stanley Direct. They said no. But I've just sent off an email to their Manchester Office.

My previous online broker charged £7.95 commission on all trades and no annual fee.

The only broker I've found that will open an account for me charge, for example, £279 to buy £15,000 worth of equities (that is 1.86% of the trade).

torata
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Re: UK Sharedealing accounts for non-residents

#251556

Postby torata » September 13th, 2019, 12:53 am

As you'll quickly realize, I have no professional knowledge about this, but I think there are several pitfalls...

- often the account opening conditions of these financial institutions means you are signing something that says you are resident in the UK, not just 'living' in the UK (for a couple of weeks while on holiday). That means for tax purposes. So that means that you would be required to pay tax in the UK on dividends and capital gains tax. You could say, well I'm well below my tax allowance, but if you aren't actually tax resident in the UK, then I'm not sure you actually have a tax allowance (capital gains for non-residents is non-reportable, I know, but I don't know if even the 2,000GBP dividend allowance applies)

- now with the sharing of information across borders (albeit at the early stages), by saying you are in the UK if in fact for tax purposes you aren't then that could raise issues with the country that you are in fact tax resident.

So there could be trouble along the lines of 'tax avoidance', in both the UK and overseas.

The only kind of 'oops I didn't notice' way that I see could work is to actually be tax resident in the UK when the account is opened, then 'forget' to tell them when you move abroad.

It used to be that banks etc would turn a blind eye. About 5 years ago I was told by a bank 'manager' who clearly wanted to meet his quota of credit card sales, "just change your address to your mother's with the teller and come back in 5 mins and we'll complete the paperwork. You can change your address back after you get the cards"

No answers from me - sorry. But I'd be very interested to hear what you do, as I'm in the same situation. As far as I know, there's no technical or legal reason why institutions can't open accounts for overseas residents (US nationals excepted), it's purely for ease of operations.

torata

samuzza
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Re: UK Sharedealing accounts for non-residents

#251563

Postby samuzza » September 13th, 2019, 4:20 am

Thanks for your reply torata.

The country I'm in at the moment (Thailand) has a double taxation agreement with the UK. And there is no tax on income earned from abroad, unless it is remitted in the year it is earned.

This is the info. from the FAQs section of one broker who will open an account for me.

The decision to open an account for a client based in a country outside the UK/EU will be influenced by;
1) The purpose or reason for the account, i.e. why you want to open an account and the nature of business you expect the account to be used for.
2) The type of account, e.g. an Individual account, a Company account, a Trust account etc.
3) Your country of residence or domicile and the level of regulatory and money laundering/terrorist financing controls in place in that country.


Another option I found is Sharedealing with HSBC InvestDirect.

But you need to open an expat account first, and new customers then have to keep a £50,000 cash balance in their expat account.

torata
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Re: UK Sharedealing accounts for non-residents

#251567

Postby torata » September 13th, 2019, 6:32 am

samuzza wrote:Thanks for your reply torata.

The country I'm in at the moment (Thailand) has a double taxation agreement with the UK. And there is no tax on income earned from abroad, unless it is remitted in the year it is earned.

This is the info. from the FAQs section of one broker who will open an account for me.

The decision to open an account for a client based in a country outside the UK/EU will be influenced by;
1) The purpose or reason for the account, i.e. why you want to open an account and the nature of business you expect the account to be used for.
2) The type of account, e.g. an Individual account, a Company account, a Trust account etc.
3) Your country of residence or domicile and the level of regulatory and money laundering/terrorist financing controls in place in that country.


Another option I found is Sharedealing with HSBC InvestDirect.

But you need to open an expat account first, and new customers then have to keep a £50,000 cash balance in their expat account.


Thanks Samuzza

A quick confirmation: are you sure it's 50,000GBP? Their website says 5,000GBP
https://www.expat.hsbc.com/1/2/hsbc-expat/products/current-accounts/bank-account/eligible

Regarding the broker whose FAQ you quoted, which broker is that as a matter of interest?

I'm waiting to see what will happen with SVS accounts. No doubt they will have to move them somewhere, and it will be (ahem) **interesting** to see what will happen to those accounts for overseas residents.
In a worst case scenario, the broker that takes over the accounts will refuse to accept the overseas accounts and they'll be cashed out.
But it may be that they will accept them. My bank for example refuses new applications from non-residents, but is quite happy to deal with me overseas, even sending 2-factor SMSs to a foreign mobile.

torata

samuzza
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Re: UK Sharedealing accounts for non-residents

#251665

Postby samuzza » September 13th, 2019, 4:16 pm

Thanks Samuzza

A quick confirmation: are you sure it's 50,000GBP? Their website says 5,000GBP
https://www.expat.hsbc.com/1/2/hsbc-exp ... /eligible/


I chatted with some guy from HSBC expat using their live chat service (https://www.expat.hsbc.com/1/2/hsbc-exp ... ontact-us/).

I asked the guy to explain why their webpage states 'Minimum balance requirement: £5,000", then "Eligibility New customers need to hold a minimum of £50,000 (or currency equivalent) in deposits/investments"

I wanted to know if I could have a £5,000 in cash, and invest £45,000+ in shares with HSBC InvestDirect.

The guy said no. I would have to have £5,000 in cash, then £45,000 their World Selection portfolios (his example).

Link for World Selection portfolios http://investmentsplanning.je.personal- ... y#slimline

These investments have pricey entry fees (1%) and ongoing charges (1.32%-1.54% pa). And if you look at the factsheets, I think it's easy do something similar with Vanguard or iShares ETFs at a fraction of the price.

As I type this now, I'm wondering if guy was mistaken or just trying to push me in the direction of pricer products. So I might enquire again.

Regarding the broker whose FAQ you quoted, which broker is that as a matter of interest?


Redmayne-Bentley (http://www.redmayne.co.uk/faqs) was the other broker I contacted. Again pricey. And telephone only service (I think).

I'm an SVS client too.

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Re: UK Sharedealing accounts for non-residents

#253658

Postby SeagoonN » September 24th, 2019, 5:46 pm

Try Interactive Brokers - I think that they will open an account for you if you are in Thailand.

Their trading screen can be a bit complex but charges are low and you can also do Forex at good rates.

Neddy

DiamondEcho
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Re: UK Sharedealing accounts for non-residents

#254805

Postby DiamondEcho » September 29th, 2019, 10:19 pm

I second Interactive Brokers. I opened my a/c (as a Brit) when living in in continental Europe, moved to SE Asia, then again to the Middle-East, then back home to the UK. Most brokers (or at least discount or 'economical brokers') won't even touch propositions like that.

kanga
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Re: UK Sharedealing accounts for non-residents

#256540

Postby kanga » October 8th, 2019, 10:10 am

but if you aren't actually tax resident in the UK, then I'm not sure you actually have a tax allowance (capital gains for non-residents is non-reportable, I know, but I don't know if even the 2,000GBP dividend allowance applies)


Yes you are still able to make use of the personal allowance etc.
I was also led to believe that you could also opt not to take the personal allowance and then there is some mechanism which means you pay no tax on any dividends whatever the amount. No use to me however as I have to pay tax on some property income anyway.


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