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International trading
We're here to help you get set up and understand international trading by answering your common questions.
How do I trade US shares?
To trade US shares there are two forms you need to complete first. Please note, these need to be completed in the order shown below.
-
From your personal computer:
- fill in and sign the document using Adobe Sign
- email the completed form to us.
From your phone:
- if you’re an Apple user, you can use Markup to fill in the form
- if you use Android, apps like Adobe Fill and Sign can help you fill in the form
- email the completed form to us.
By post, send the completed form to:
Customer Registration Department
Scottish Widows Share Dealing
12 Wellington Place
Leeds
LS1 4AP -
The W-8BEN form is valid for three calendar years from the year you sign it, unless your personal circumstances change. Please inform us within 30 days if this happens. We'll contact you when your form is due to expire.
You'll see the NYSE agreement only the first time you place an international trade. If your circumstances change, please contact us. We might share your information with NYSE if they request confirmation of your status as a non-professional investor.
Which international markets can I trade on?
You can trade on six global stock markets with our trading accounts. International markets have different opening hours compared to the London Stock Exchange, allowing you to trade from 8am to 9pm, Monday to Friday.
|
Stock exchange |
UK times |
Local times |
|---|---|---|
|
Stock exchange New York (NYSE, NASDAQ, NYSE Amex) |
UK times 2.30pm to 9pm |
Local times 9.30am to 4pm |
|
Stock exchange Frankfurt (XETRA) |
UK times 8am to 4.30pm |
Local times 9am to 5.30pm |
|
Stock exchange Milan (Euronext) |
UK times 8am to 4.25pm |
Local times 9am to 5.25pm |
|
Stock exchange Paris (Euronext) |
UK times 8am to 4.30pm |
Local times 9am to 5.30pm |
|
Stock exchange Amsterdam (Euronext) |
UK times 8am to 4.30pm |
Local times 9am to 5.30pm |
|
Stock exchange Brussels (Euronext) |
UK times 8am to 4.30pm |
Local times 9am to 5.30pm |
These times may change, as Daylight Savings Time affects US market hours.
Charges and Foreign Exchange
|
Charge |
Amount |
|---|---|
|
Charge Cost of shares in USD |
Amount 10 x $100 = $1,000.00 |
|
Charge Cost of shares in GBP |
Amount $1,000.00 / 1.36 = £735.29 |
|
Charge FX rate with charge added (1.5%) |
Amount 1.5% of 1.36 = 0.0204 |
|
Charge Cost of shares in GBP including FX charge |
Amount $1,000 / 1.3396 = £746.49 |
|
Charge FX cost |
Amount £746.49 - £735.29 = £11.20 |
Frequently asked questions about trading
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Trading on foreign markets involves different risks than trading on UK markets. Sometimes, these risks can be greater.
- Culture: Language and cultural differences may make it hard to get important information for your trading decisions.
- Currency Risks: Your potential profit or loss may change due to fluctuations in foreign exchange rates.
- Economy and Politics: Economic and political factors in the UK can affect overseas markets. The overall economic outlook and market conditions may differ significantly from those in the UK.
- Emerging Markets: Emerging markets are often less developed than UK markets, leading to greater volatility in share prices. Your investments may change value quickly.
- Shareholder Rights: As a shareholder, you might miss out on some rights and benefits because you live in a different jurisdiction. This may affect your participation in corporate events, such as Rights Issues, and could result in losses.
- Taxation: Tax laws abroad differ from those in the UK. Some countries may impose higher tax rates. Remember that ISAs and SIPPs will protect you only from UK tax. Tax calculations abroad could affect the value and returns of your foreign investments.
- Trading and Settlement: Foreign markets may trade at lower volumes than UK markets. This reduced liquidity may make it harder to sell shares, possibly causing delays in settlements.
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International orders are processed directly through the order book at face value. This method gives us access to a wider range of markets at a lower cost, but it means that a live quoting service isn't available.
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You need to specify a quantity for international trades because orders are placed directly on the relevant market's order book. You can't use an invest option.
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When you invest in international shares, you usually need an additional 10% of the total trade value as a buffer against price fluctuations.
Keep in mind that you don't need a 10% buffer to sell international shares, but due to the order book system, 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 the trading day. If your order doesn't go through or is only partially completed, you'll need to place a new order the next trading day.
When you trade UK shares, we use automated systems to get quotes from all available market counterparties at once. We automatically take the best available price and show it to you. Your order executes at the best price available. There's no 10% buffer needed for UK shares, and you can use an invest option to trade up to the total amount in your account.
Frequently asked questions about income and tax
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Withholding tax is income tax that we hold back and pay directly to the government on your behalf. This is so any tax owed is paid as soon as possible, to avoid tax evasion or under-reporting.
Withholding tax is usually deducted when foreign corporations or governments make dividends or interest payments. The amount deducted varies by country and can reduce your returns. You can see the amount of withholding tax you paid on your consolidated tax certificate online. If you're not registered online, we'll send this certificate to you at the end of the tax year. -
If you complete a W-8BEN form, you'll typically pay a 15% withholding tax on US listed shares paying US sourced dividends, instead of 30%.
For UK listed shares paying US sourced dividends, a 30% withholding tax applies, even if you have a W-8BEN form. For example, on a $100 dividend, you'd receive $70. -
The Scottish Widows Share Dealing SIPP service can't arrange for US sourced income to be paid entirely exempt from US tax. Within our SIPP, a 30% withholding tax applies to all US sourced dividends unless the shares are US listed and you've completed a W-8BEN form. In that case, a 15% rate applies.
Other SIPP providers may offer a zero rate of withholding tax on US sourced dividends, meaning no tax is deducted, and you receive the full dividend amount. We currently don't offer this option and don't provide a foreign withholding tax reclaim service.
How this affects your holdings
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 it, we can apply a reduced 15% Withholding Tax rate. For example, you'd receive $85 on a $100 dividend. For UK listed shares paying US sourced dividends, if you have a W-8BEN form, you'll still pay a 30% Withholding Tax, resulting in receiving $70 on a $100 dividend.