Using a stocks and shares ISA is a great way to start building an investment portfolio. Furthermore, ISAs can be used to buy stocks internationally as well as from the UK! Investing in international stocks could help you to diversify your portfolio and take advantage of overseas markets.
The US, in particular, is a strong market to invest in. This is due to the large number of companies that operate in the region. So, how do you buy US stocks through a stocks and shares ISA?
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Choosing the right stocks and shares ISA for US stocks
In order to trade US stocks, you will need to open a stocks and shares ISA that enables you to trade internationally. This means that the ISA will give you access to the global stock market – including US stocks.
There are a number of stocks and shares ISAs that allow you to trade internationally. Here are three great options!
1. IG Stocks and Shares ISA
The IG Stocks and Shares ISA offers a fantastic variety of stocks to build a diverse portfolio. As well as this, the ISA offers two account types that investors can split their funds between. The Smart Portfolio ISA is a fully managed portfolio in which investments are based on your risk profile.
IG also offers a share dealing account that provides more trading flexibility. You can choose between the two or invest in both! The platform also provides excellent educational resources for new traders who want to sharpen their skills.
2. Interactive Investor Stocks and Shares ISA
If you want the safety of a market-leading investment platform, the Interactive Investor Stocks and Shares ISA could be a great option for you! This ISA caters to all types of investors, whether they have years of experience under their belts or are complete beginners.
If you choose to open an Interactive Investor ISA, you will be given one free trade every month! You can also choose between several investor plans that make it easy to tailor the ISA to your preferences.
3. Saxo Markets Stocks and Shares ISA
If you have a bit of trading experience and you are interested in trading global markets, the Saxo Markets Stocks and Shares ISA could be what you’re looking for!
The ISA offers a number of features that could be very appealing to the more experienced investor, such as access to exchange-traded funds and investment trusts across leading global exchanges. The platform also offers excellent risk management tools to provide a safety net for those investing with large amounts of capital.
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How US stock trading works
Once you have opened a stocks and shares ISA that allows international trading, you will be able to choose US stocks for your portfolio. Alternatively, you can invest in a managed portfolio that includes international investments.
Just like UK stocks, investing in the US stock market will give you a fraction of a US company. You can make a profit when the price of each share increases. The US stock market typically operates between 9:30am and 4:00pm Eastern Time (ET). This is when the price of investments will fluctuate the most and when the majority of US stock trading takes place.
Completing the relevant tax form
Before trading US stocks, you will need to complete the relevant tax form. A non-US resident is required to complete the W-8BEN form, which is valid for three years after completion. This form allows US tax reductions to be taken from your dividends or any income that you make from trading in the US market.
If you are investing through a stocks and shares ISA, the trading platform will usually ask you to complete the form before making any US stock investments.
A Foolish note on US stock trading
Just like the UK market, the US stock market is prone to fluctuations that can put any capital you invest at risk. Always conduct thorough research before making any investment decisions and ask an expert for advice if you’re unsure!
Please note that tax treatment depends on the individual circumstances of each individual and may be subject to future change. The content of this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
The post Ask a Foolish question: “can I buy US stocks through a stocks and shares ISA?” appeared first on The Motley Fool UK.
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