Which brokers trade dollar listed ETFs on London Stock Exch

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Vistas2011
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Which brokers trade dollar listed ETFs on London Stock Exch

Post by Vistas2011 » Thu Apr 16, 2015 12:22 pm

I am an expat and I have dollars and do not want to exchange them. I want to buy VUSD and VDNR which are Irish domiciled US dollar listings but neither Saxo nor ETrade show these. They only show the Sterling versions VUSA and VNRT. What brokers deal with the dollar listed ETFs that are on the London Stock exchange? Same problem exists with Ishares. Saxo lists CSP1 which is in Sterling but not the dollar listing CSPX. I could go on. Saxo lists no dollar listed ETF which are on the London exchange.

Micks
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Micks » Thu Apr 16, 2015 1:19 pm

You should be able to buy them with Interactive Brokers. At least, I can find the funds you mention here. Alternatively, you could ask your current brokers whether they can set up the possibility to trade it, I only do not know if they are willing to do that for you (and if they will do it for free).
Kind regards, Mick

Kalergie
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Kalergie » Thu Apr 16, 2015 1:54 pm

I can confirm that Interactive Brokers allows you to buy the funds you mention in USD. You just have to set a check mark next to LSE in the account settings. But I don't know if the same applies to Saxo.

Vistas2011
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Vistas2011 » Thu Apr 16, 2015 3:20 pm

Thanks, but if I open an account in Interactive, which is an USA company, won't I be liable for 35% estate tax on my assets over $60,000 upon my death?

Saxo does not list these ETFs and I got a reply saying that their system won't "support 2 currencies on 1 ISIN in 1 exchange due to system limitations".

Oliver
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Oliver » Thu Apr 16, 2015 8:13 pm

Vistas2011 wrote:Thanks, but if I open an account in Interactive, which is an USA company, won't I be liable for 35% estate tax on my assets over $60,000 upon my death?

Saxo does not list these ETFs and I got a reply saying that their system won't "support 2 currencies on 1 ISIN in 1 exchange due to system limitations".

You can open IB accounts in a number of countries.

http://en.m.wikipedia.org/wiki/Interact ... bsidiaries

TedSwippet
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by TedSwippet » Fri Apr 17, 2015 3:30 am

Vistas2011 wrote:Thanks, but if I open an account in Interactive, which is an USA company, won't I be liable for 35% estate tax on my assets over $60,000 upon my death?

It's... complicated.

Are you a non-US person (that is, neither a US citizen nor green card holder? Do you live in a country without an estate tax treaty with the US? If yes to both of these then US estate tax is a concern if you invest more than $60k (and if no to either then it's a concern if you invest more than $5m or so).

If you're an NRA living in a non-estate tax treaty country and you open a US brokerage account, then any cash in the account would be at risk from the US estate tax. Any US stock or US domiciled ETFs you hold in that account would also be at risk from the US estate tax. However, any non-US stock or non-US domiciled ETFs you hold in that account should be safe from the US estate tax.

So if you open an account with a US brokerage then keep your cash balance low at all times, and only invest in non-US domiciled ETFs. If you open an account with a non-US brokerage then you don't have the cash balance worry, but still want to invest only in non-US domiciled ETFs.

Vistas2011
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Vistas2011 » Sat Apr 18, 2015 2:23 pm

"Are you a non-US person (that is, neither a US citizen nor green card holder? Do you live in a country without an estate tax treaty with the US?" Yes, that is my situation. Your solution - "So if you open an account with a US brokerage then keep your cash balance low at all times, and only invest in non-US domiciled ETFs."- sounds perfect to me. What is your source or basis for this solution?

TedSwippet
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by TedSwippet » Sat Apr 18, 2015 5:15 pm

This paper, among others, lists the major lowlights of US estate taxes for NRAs. Extract of the US situs assets section:

U.S. Situs Assets for Estate Tax Purposes: The following is a partial list:
...
Shares of stock of U.S. corporations, ... Mutual funds (including money market funds) organized in corporate form are U.S. situs property if incorporated in the United States ...
Cash deposits with U.S. brokers, money market accounts with U.S. mutual funds and cash in U.S. safe deposit boxes are U.S. situs property. ...

Bank accounts maintained with U.S. banks are not U.S. situs property: this includes checking and savings accounts, time deposits and certificates of deposit.

So cash at a US bank is not US situs (except if held physically in a safe deposit box), but cash at a US broker is. Entirely unintuitive and nonsensical, of course.

One final note. If you're planning a large portfolio you may still want to avoid US brokers even if you are sure you can navigate this US tax minefield. There are two reasons for this. The first is compliance. A US broker may insist on freezing your account for many months while they wait for a statement from the IRS that your heirs have filed a US estate tax return -- even where there is no actual US estate tax owing. Read up on IRS form 706na for details. The second is that US tax laws for NRAs change often, and to the detriment of the NRA. Using a non-US broker might might save you a lot of constant checking for disadvantageous changes in US tax laws.

Vistas2011
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Vistas2011 » Sat Apr 18, 2015 9:48 pm

The idea of avoiding the US broker and us stocks sounds prudent. Thank you for your input.

Caduceus
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Caduceus » Sat Apr 18, 2015 10:02 pm

However, any non-US stock or non-US domiciled ETFs you hold in that account should be safe from the US estate tax.

So if you open an account with a US brokerage then keep your cash balance low at all times, and only invest in non-US domiciled ETFs. If you open an account with a non-US brokerage then you don't have the cash balance worry, but still want to invest only in non-US domiciled ETFs.


I am not sure I understand what happens upon death. Even if the person holds non-US domiciled positions, they will have to be sold at some point after death into cash that is held by the US broker, which transforms it into a U.S-situs asset. Or are you saying that upon death, the position (still non-US domiciled) passes into the control of the beneficiary, who is then free to transfer the US-situs cash or non-US situs stock to his/her account?

(Or perhaps the positions can be transferred in-kind)?

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Sun Apr 19, 2015 12:53 am

Vistas2011 wrote:
Saxo does not list these ETFs and I got a reply saying that their system won't "support 2 currencies on 1 ISIN in 1 exchange due to system limitations".


Few years back, I had the same issue with Keytrade. I couldn't buy iShares ETF in USD but I had to convert USD to EUR and buy it at Amsterdam exchange. Even more annoying was that the ETF even though it was EUR denominated, it was paying dividends in USD which I couldn't even withdraw from Keytrade without converting to EUR and losing quite a bit at exchange rate.

TedSwippet
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by TedSwippet » Sun Apr 19, 2015 4:03 am

Caduceus wrote:Or are you saying that upon death, the position (still non-US domiciled) passes into the control of the beneficiary, who is then free to transfer the US-situs cash or non-US situs stock to his/her account?

That one, in my experience -- based on a sample set of one. At death of an account holder a US broker may block access to the account until the IRS tells them that it has received and checked the 706na estate tax return. This could take many months and require certified copies of non-US probate documents and any non-US estate tax return .

Much simpler to avoid US brokers, and avoid US stocks and US-domiciled funds and ETFs.

SurferD
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Sun Apr 19, 2015 4:49 am

Tylenol Jones wrote:
Vistas2011 wrote:
Saxo does not list these ETFs and I got a reply saying that their system won't "support 2 currencies on 1 ISIN in 1 exchange due to system limitations".


Few years back, I had the same issue with Keytrade. I couldn't buy iShares ETF in USD but I had to convert USD to EUR and buy it at Amsterdam exchange. Even more annoying was that the ETF even though it was EUR denominated, it was paying dividends in USD which I couldn't even withdraw from Keytrade without converting to EUR and losing quite a bit at exchange rate.


That is very interesting Tylenol about Keytrade. I was looking into them as an option and that restriction you highlight would certainly not work for me as I also want to avoid any exchange requirement on their side and deal straight in USD. That has taken Keytrade off my list.

I am now looking at TD Direct International and although they do a have low trading monthly fee it seems like they may be the best in terms of overall cost and are domiciled in luxembourg but I haven't managed to find out if they have the same issue as you highlight for Keytrade in regards to a Euro trading requirement and if USD can be used easily without any exchange requirements. Do you or anyone else know if this is the case?

regards
SurferD

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Sun Apr 19, 2015 9:02 am

There was a SwissQuote review and comparison on this website

http://the-international-investor.com/

They have reviews of lots of Hong Kong and Singapore based brokers which might be good if no custody fees and reasonable LSE trading commissions.

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Mon Apr 20, 2015 1:29 am

Standard Chartered in Singapore seems to be quite competitive with 0.2% broker fee in any market including UK and no custody, dormant, etc. fees. I could not find if they support trade of USD denominated LSE ETFs.

https://www.sc.com/sg/ways-to-bank/online-trading.html

All banking fees with them for those interested for full banking solution with them

https://www.sc.com/sg/personal-banking/ ... st2012.pdf

SurferD
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Mon Apr 20, 2015 2:08 am

Tylenol Jones wrote:Standard Chartered in Singapore seems to be quite competitive with 0.2% broker fee in any market including UK and no custody, dormant, etc. fees. I could not find if they support trade of USD denominated LSE ETFs.

https://www.sc.com/sg/ways-to-bank/online-trading.html

All banking fees with them for those interested for full banking solution with them

https://www.sc.com/sg/personal-banking/ ... st2012.pdf


Thanks Tylenol I will have a deeper look at the links, thanks for posting them.
SurferD

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Tue Apr 21, 2015 5:40 am

I called SC Singapore, and the CSR told me it is possible to buy USD-denominated ETFs at LSE. He also told me it is possible for foreigners to open the investment account but they must have at least a savings account with them (both can be opened at the same time), and they must come in person in one of their Singaporean branches.

broadstone
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by broadstone » Tue Apr 21, 2015 7:23 am

Vistas2011 wrote:I am an expat and I have dollars and do not want to exchange them. I want to buy VUSD and VDNR which are Irish domiciled US dollar listings but neither Saxo nor ETrade show these. They only show the Sterling versions VUSA and VNRT. What brokers deal with the dollar listed ETFs that are on the London Stock exchange? Same problem exists with Ishares. Saxo lists CSP1 which is in Sterling but not the dollar listing CSPX. I could go on. Saxo lists no dollar listed ETF which are on the London exchange.


I'm a UK expat living in the USA. I got around this issue by opening an Interactive Brokers account when I was in the UK.

SurferD
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UAE Based SwissQuote

Post by SurferD » Wed Apr 22, 2015 3:43 am

HI everybody,
I have been looking into SwissQuote as an online brokerage option as an NRA investor residing in UAE and have received some confirmation about costs from them and clarification of some questions I had which I thought may be of interest to others. See below and please let me know what you think of the charges etc as below compared to your broker or others you have looked into:

They list their charges at: http://www.swissquote.ae/online-trading-plateform/cost-and-conditions

and my questions regarding the funds available, cost of trading etc and taxation are as below:

1. Do you have the following ETF funds available in your system for purchase (I am only interested in funds domiciled in Ireland):
SWDA: iShares Core MSCI World UCITS ETF, yes available and traded in UK, GER, IT and NED
IUAG: iShares US Aggregate Bond UCITS ETF, yes available and traded in UK, GER and USA
VWRD: FTSE All-World UCITS ETF, yes available and traded in UK
Can you also please provide a full lists of funds available in your system or a web link I can refer to? Unfortunately I cannot provide you with any list, since we have more than 40’000 Funds and ETF’s available. However you can browse them online by clicking on Markets & Quotes, Funds / ETF
2. Can you confirm that if I transfer USD to my trading account no exchange fees will be charged if I only use USD denominated ETFs. Correct, no currency exchange will take place if USD is showing a cash balance and securities will be traded in the same.
3. In the case of account costs and trading costs am I correct in saying the following:
a) Account fees for individual investors are nil (free of charge) correct
b) Dormant account fees will not be charged unless an account becomes dormant as per your definition i.e.: you lose contact with an account owner and cannot contact them. Not if the account is not used (i.e.: deposits received or transfers of funds made in or out for a period of time) …the reason I ask this is I may not be actively trading but may only have one transaction a year if rebalancing is required in my ETF investments. A buy and hold strategy is not considered as a dormant account. And as long as we have updated contact address ( email, phone, address etc. ) your account will not be treated as a dormant account.
c) Payment fees (in and out) will be as per your schedule of fees on your website at: http://www.swissquote.ae/online-trading ... conditions i.e.: inbound FREE and outbound USD 10. Please confirm. Correct, but also if in another currency i.e. GBP then the relevant charge will be made as per the costs & conditions
d) Custody fees will be as per your schedule of fees i.e.: “Custody fees for private clients and asset managers = 0.0375% quarterly (min CHF 15.00, no maximum)***. Can you also please confirm where custody is held. Is it in Switzerland or UAE? Correct, and everything is held in Switzerland
e) Taxation: will not be deducted as I am a resident of UAE. Is that correct? This is wrong. It always depends on the taxation agreement between the two states (source which is the company paying the dividend and where the client is domiciled). eg: if Apple is paying you dividends 30% taxes will be deducted as per the taxation agreement between USA and UAE. For European stocks, it is 35%. The UAE is only tax-free on assets like capital gain or coupons. For etfs and funds it depends what is exactly mentioned in the prospectus. MY COMMENT: So I assume the NRA taxation for Ireland domiciled ETFs of 15% will apply here as per othere discussions on here at https://www.bogleheads.org/wiki/Nonresident_alien_with_no_US_tax_treaty_%26_Irish_ETFs
f) Trading costs will be (For ETFs which I am interested in): 0.25%, minimum 25 equivalent currency , no maximums, Correct as per cost and conditions
g) Can you please clarify what “Physical Deliveries” on your fees website page refers to Transfer of physical share certificates
h) Can you please clarify what “Change of Stock Exchange” on your fees website page refers to: Same product can be listed at different exchanges, so if you want move your product from A to B
i) Other costs: please outline any other costs I should consider,
A fee of 0.85 is added in the corresponding currency to each transaction to cover the expense of providing real-time information through the platform. eg: It is only 0.85 USD/EUR/CHF etc… if you trade Apple worth USD 10k and the transaction charge is 25.00 you will be 25.85 USD.

Please let me know if you have any views on this or how this compares to others you may use or have been considering from a practical point of view,

Thanks
SurferD

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Wed Apr 22, 2015 5:06 am

Custody fee is 0.0375% * 4 = 0.15% per year which is greater than Saxo's 0.12%.

Trading cost of 0.25% is greater than 0.10% that Saxo asks for LSE.

So not more competitive than Saxo, which we have already figured out is quite expensive.

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Wed Apr 22, 2015 5:14 am

It's also good to compare in real costs. Fixed trading cost at LSE at IB is 0.05% so on 100K invested you pay $50. At Swissquote, it costs you 250 trading + 150 custody = 400 USD just in the first year on 100K. So 350 USD difference first year + 150 USD custody fee each year @ 8% = ~22,000 USD for keeping 100K invested over 30 years compared to $50 at IB.

SurferD
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Wed Apr 22, 2015 5:30 am

Tylenol Jones wrote:Custody fee is 0.0375% * 4 = 0.15% per year which is greater than Saxo's 0.12%.

Trading cost of 0.25% is greater than 0.10% that Saxo asks for LSE.

So not more competitive than Saxo, which we have already figured out is quite expensive.


Thanks Tylenol, as usual you cut straight to the bone like a razor :) and you are right those numbers looks scary over time.. :oops:

The search has to go on then for a better one for us expat NRA investors. IB is much better in this regard but again is a US based brokerage with the associated tax and other issues or am I wrong?

I would be interested to see if anyone else has investigated other options?

Thanks for the insight
SurferD

Kalergie
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Kalergie » Wed Apr 22, 2015 8:00 am

@SurferD: Awesome job! Thanks for sharing this. I once had a 30 minute telcon with a guy from SwissQuote based in DIFC (Dubai International Financial Center). It was very refreshing to speak to a well educated and open service representative. He answered all my questions on the spot correctly and knew what I needed. They really know what they are talking about. However, as outlined by TylenolJones, IB is the way to go in terms of cost. Swissquote is the best for people who like to have someone locally to speak to.

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banoffeeape86
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by banoffeeape86 » Wed Apr 22, 2015 6:51 pm

SurferD, awesome work! :beer

Now the top options are TD Direct Investing and IB (US). Have you directed your questions at TD Direct Investing Luxembourg?

SurferD
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Wed Apr 22, 2015 11:39 pm

Kalergie wrote:@SurferD: Awesome job! Thanks for sharing this. I once had a 30 minute telcon with a guy from SwissQuote based in DIFC (Dubai International Financial Center). It was very refreshing to speak to a well educated and open service representative. He answered all my questions on the spot correctly and knew what I needed. They really know what they are talking about. However, as outlined by TylenolJones, IB is the way to go in terms of cost. Swissquote is the best for people who like to have someone locally to speak to.


Thanks Kalergie,
I guess thats Swiss efficiency at play even here :) The guy I emailed has been very open and frank and answered everything well even the tax question although not 100% correctly answered, he offered to review the fund documentation to advise me better..so a great help. Its just the custody fees that are the problem and I must say from Tylenols real cost analysis it really does show how it can make a difference over time and how every aspect needs to be investigated in this over and above the Fund costs, tax and asset allocations etc the actual brokerage chosen can have quite a drag too on the returns..I shudder to think what I am losing on my managed funds in Australia with a ER of 1.43 plus tax :annoyed but thats another story

SurferD

SurferD
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Wed Apr 22, 2015 11:51 pm

amerk86 wrote:SurferD, awesome work! :beer

Now the top options are TD Direct Investing and IB (US). Have you directed your questions at TD Direct Investing Luxembourg?


Hi Amerk86, I haven't yet but will work on it and see what they say :)

They lay out the costs pretty clearly here: http://int.tddirectinvesting.com/en-gb/investment-products/fees-and-commissions/account-fees/ but for low trade frequncy investors like us there would be a EUR100 per year charge (for less than 12 trades made) or EUR180 per year for no trades made.

So is this just something we have to take as a cost of investing and accept it as its a fixed cost (for now) then is it manageable?

SurferD

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Thu Apr 23, 2015 2:31 am

It's 48 trades/year to avoid 100 EUR fee.

Has anyone checked that you can indeed buy USD-denominated ETFs @ LSE through TD Direct online? Is it the same 15 EUR trading fee for USD ETFs?

SurferD
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TD Direct Luxembourg Charges

Post by SurferD » Thu Apr 23, 2015 4:52 am

Tylenol Jones wrote:It's 48 trades/year to avoid 100 EUR fee.

Has anyone checked that you can indeed buy USD-denominated ETFs @ LSE through TD Direct online? Is it the same 15 EUR trading fee for USD ETFs?


HI Tylenol,

I justs asked TD Direct Lux the same questions I asked SwissQuote and they are really fast in replying so thats great. I have copied the Qs and replies below for everyone:

NOTE: I haven't checked the funds are available as yet so if anyone does please let us know.

Questions and answers to TD Direct Luxembourg

1. Do you have the following ETF funds available in your system for purchase (I am only interested in funds domiciled in Ireland as I am an expat investor situated in UAE):
• SWDA: iShares Core MSCI World UCITS ETF
• IUAG: iShares US Aggregate Bond UCITS ETF
• VWRD: FTSE All-World UCITS ETF
- Can you also please provide a full lists of funds available in your system or a web link I can refer to?
Yes, the three ETFs you listed are on our platform, you can find them by using our ETF quickrank tool
http://int.tddirectinvesting.com/en-gb/investment-products/stock-trading/etfs-etns-and-etcs/etf-quickrank/

NOTE: I haven’t confirmed the funds we want are actually on the site so anyone who does please let us all know.

2. Can you confirm that if I transfer USD to my trading account no exchange fees will be charged if I only use USD denominated ETFs and withdraw funds again in USD. There is no exchange in the scenario you described

3. In the case of account costs and trading costs am I correct in saying the following:

a) Account fees for individual investors are nil (free of charge) - correct

b) Annual Account Maintenance Fees: will be charged as per your website at EUR25 for low traders (less than 12 per year) or EUR45 per quarter if no trades are made - Account maintenance fees are €45 per quarter if no trade is placed, €25 per quarter if at least 1 trade is placed and completely free if more than 12 trades are placed in the said quarter.

c) Payment fees (in and out) i.e.: inbound FREE and outbound EUR 10 for a USD outbound transfer to a UAE bank. Please confirm. – correct

d) Custody fees: Nil. - correct

e) Can you also please confirm where custody of investments is held and by whom. - UBS and TD Ameritrade for North American listings

f) Taxation: Please confirm if any taxes will be deducted in Luxembourg from dividends paid or capital gains as I am a resident of UAE and if so how much. - maximum withholding tax is deducted at source on dividends, there is no capital gain tax in Luxembourg or the UAE

g) Trading costs will be (For trading in UK, US and Canada: Charges will be: EUR 14.95 or 0.03% for amounts over EUR250,000.

h) Other costs: please outline any other costs I should consider not listed above.
ADVANCED TRADING PLATFORM
Clients who trade shares and ETFs at least 12 times per rolling 3-month period receive free access to the Advanced Trading Platform from the first day of the month following the 12th trade.
Low activity traders (less than 12 trades per month) accessing only the UK stock exchanges will be charged EUR 5 per month (level 1 quotes – real time streaming level 1 quotes and access to advance trading platform plus research) and to access North America and UK is EUR 15 per month.

I asked them to confirm this and his reply: The Active Trader Platform is an option and I don’t believe you would need such a sophisticated tool if you are only planning on trading ETFs.

Anyone have an opinion/analysis of TD Direct Lux as an option for NRA expat Investors?
Regards
SurferD

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Thu Apr 23, 2015 5:25 am

It looks good to me. Probably the best one can find in Europe, and TD should be relatively safe as it's probably backed by TD Bank Group (ranked 11th last year in bank safety https://www.gfmag.com/magazine/november ... 014?page=3)

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banoffeeape86
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by banoffeeape86 » Thu Apr 23, 2015 9:47 am

SurferD, you are the best!

My summary of things is now as follows if you want to trade Irish-domiciled LSE-listed ETFs:
  • If you don't mind using a US brokers, use IB. No account fees and lower transaction fees.
  • If you want an EU broker (that's me), it depends on your portfolio size. Saxo Bank is cheaper if less than 135k USD, as the 0.12% would be less than TD's. If more than 135k USD, then TD Direct Investing is cheaper at a flat fee of 160 EUR per year (assuming we rebalance once a year).
I have not taken transaction fees into consideration, yet, but I like paying flat fees rather than percentages.

Thanks again!! :beer

Mambo_Diablo
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Mambo_Diablo » Fri Apr 24, 2015 2:24 am

TedSwippet wrote:It's... complicated.

Are you a non-US person (that is, neither a US citizen nor green card holder? Do you live in a country without an estate tax treaty with the US? If yes to both of these then US estate tax is a concern if you invest more than $60k (and if no to either then it's a concern if you invest more than $5m or so).

If you're an NRA living in a non-estate tax treaty country and you open a US brokerage account, then any cash in the account would be at risk from the US estate tax. Any US stock or US domiciled ETFs you hold in that account would also be at risk from the US estate tax. However, any non-US stock or non-US domiciled ETFs you hold in that account should be safe from the US estate tax.

So if you open an account with a US brokerage then keep your cash balance low at all times, and only invest in non-US domiciled ETFs. If you open an account with a non-US brokerage then you don't have the cash balance worry, but still want to invest only in non-US domiciled ETFs.
Poor Ted, I think you've answered this question so many times already! This answer is succinct and uncomplicated. I decided to open an account with IB because the advantages of low commissions, 500k insurance, good industry standing, low margin rates, and excellent access to a broad range of international products outweighs anything that any other non-US broker can offer given that there are a multitude of Irish dom ETFs to choose from which thus shields us NRA folk from the estate tax issue. I can't see any point in opening a share trading account and then holding >60k cash in there.

Mambo_Diablo
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Mambo_Diablo » Fri Apr 24, 2015 2:38 am

SurferD wrote:
amerk86 wrote:SurferD, awesome work! :beer

Now the top options are TD Direct Investing and IB (US). Have you directed your questions at TD Direct Investing Luxembourg?


Hi Amerk86, I haven't yet but will work on it and see what they say :)

They lay out the costs pretty clearly here: http://int.tddirectinvesting.com/en-gb/investment-products/fees-and-commissions/account-fees/ but for low trade frequncy investors like us there would be a EUR100 per year charge (for less than 12 trades made) or EUR180 per year for no trades made.

So is this just something we have to take as a cost of investing and accept it as its a fixed cost (for now) then is it manageable?

SurferD
Remember you still pay that low trade fee even if you make say one trade per month. I decided the low risk that some crazy future US tax law will seize my assests does not outweigh the present and real advantages of IB. Ted has advised to check for changes to tax laws which could affect NRAs so I'll ask my international tax specialist accountant to do that for me.

The big difference between TD direct and IB is that the $10 monthly fee at IB is inclusive of trade commissions, so if you make one trade worth $10 or two worth $5 each, then it still only costs $10. With TD direct lux the trade costs are on top of the quarterly fee. I don't have 100k in my IB account yet, but I plan to be there within about 12 months, then the monthly fee is waived.

IB told me they are in the process of setting up an Australian subsidiary, so when the time comes that we move home and become residents again, the process of repatriating funds could be a whole lot easier since it will be an internal transfer within IB.

Clearly, if it weren't for the risk of unknown future tax law changes, IB would be the winner. But the reality is that this could occur anywhere. I read recently that Luxembourg is facing pressure itself over their tax laws. -> http://fortune.com/2015/01/22/luxembour ... tax-haven/

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Fri Apr 24, 2015 3:08 am

amerk86 wrote:SurferD, you are the best!

My summary of things is now as follows if you want to trade Irish-domiciled LSE-listed ETFs:
  • If you don't mind using a US brokers, use IB. No account fees and lower transaction fees.
  • If you want an EU broker (that's me), it depends on your portfolio size. Saxo Bank is cheaper if less than 135k USD, as the 0.12% would be less than TD's. If more than 135k USD, then TD Direct Investing is cheaper at a flat fee of 160 EUR per year (assuming we rebalance once a year).
I have not taken transaction fees into consideration, yet, but I like paying flat fees rather than percentages.

Thanks again!! :beer


I don't remember exactly, but I think someone pointed out that you cannot buy USD-denominated LSE ETFs through Saxo. So I think Saxo is off the list.

Tylenol Jones
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Fri Apr 24, 2015 3:15 am

@Mambo

That's my reasoning too. For the fixed income component, I also prefer to hold treasuries directly rather than through ETF. They are estate tax exempt, you don't pay interest on interest (as compared to dividends), trading is free at all major US brokers such as Etrade, Fidelity, Schwab, and so on, all of whom let you open an account as NRA. Also if one does this, you get some kind of extra institutional diversification for free. IB is great for ETFs and for it's awesome money transfer and conversion capabilities. You move part of that money to another major broker and get treasuries directly there. Ultra cheap and safe setup IMO.

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banoffeeape86
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by banoffeeape86 » Fri Apr 24, 2015 6:43 pm

Tylenol Jones wrote:I don't remember exactly, but I think someone pointed out that you cannot buy USD-denominated LSE ETFs through Saxo. So I think Saxo is off the list.

Not quite. The problem was for example the IWDA was listed on SIX and LSE. Their system does not accept more than 1 ISIN with the same denomination, so they only had the SIX listing, and not the LSE one.

I have an account that I'm experimenting with at SaxoBank, and I have IUAG (LSE), EIMI (LSE) and IWDA (SIX), all in USD.

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Sat Apr 25, 2015 12:34 am

I see, thanks for the clarification. Can you see if VWRD is available?

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banoffeeape86
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by banoffeeape86 » Sat Apr 25, 2015 4:06 am

Tylenol Jones wrote:I see, thanks for the clarification. Can you see if VWRD is available?

Yes. Here is a screenshot: http://prntscr.com/6xwv4l - It's listed as VWRD:xlon in USD.

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Sat Apr 25, 2015 4:34 am

Thanks!

Vistas2011
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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Vistas2011 » Sat Apr 25, 2015 4:11 pm

Interactive Brokers now has a UK branch and trades in dollar based Irish dom ETFs. Does anyone know if an account opened with IB UK would be considered a non US account even though the parent company is a US company? If so that seems like it would be the best option for the NRA who is very afraid of the long arm of the US IRS. However, I don't think it has the SIPC protection.

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Mambo_Diablo » Sun Apr 26, 2015 1:16 am

Vistas2011 wrote:Interactive Brokers now has a UK branch and trades in dollar based Irish dom ETFs. Does anyone know if an account opened with IB UK would be considered a non US account even though the parent company is a US company? If so that seems like it would be the best option for the NRA who is very afraid of the long arm of the US IRS. However, I don't think it has the SIPC protection.
You need to be living in the UK to open an IB UK account. I asked this question and they told me that my account will be with the US entity since I do not live in the UK.

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Sun Apr 26, 2015 6:17 am

Mambo_Diablo wrote:
Vistas2011 wrote:Interactive Brokers now has a UK branch and trades in dollar based Irish dom ETFs. Does anyone know if an account opened with IB UK would be considered a non US account even though the parent company is a US company? If so that seems like it would be the best option for the NRA who is very afraid of the long arm of the US IRS. However, I don't think it has the SIPC protection.
You need to be living in the UK to open an IB UK account. I asked this question and they told me that my account will be with the US entity since I do not live in the UK.


Hi Diablo, so does that mean that you will then be taxed as if you are US based investor or does the NRA status still apply through IB even though the brokerage is in US?

This is a big factor to consider and that is why I was looking at Luxembourg based TD Direct.

We need to find this out before we can choose between the two I think :)

SurferD

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Micks » Sun Apr 26, 2015 6:29 am

SurferD wrote:Hi Diablo, so does that mean that you will then be taxed as if you are US based investor or does the NRA status still apply through IB even though the brokerage is in US?

This is a big factor to consider and that is why I was looking at Luxembourg based TD Direct.

We need to find this out before we can choose between the two I think :)

SurferD


You will not be taxed as a US based investor, they require you to fill out a W8 form to determine your domicile for taxes (see here).
Kind regards, Mick

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Sun Apr 26, 2015 10:47 pm

Micks wrote:
SurferD wrote:Hi Diablo, so does that mean that you will then be taxed as if you are US based investor or does the NRA status still apply through IB even though the brokerage is in US?

This is a big factor to consider and that is why I was looking at Luxembourg based TD Direct.

We need to find this out before we can choose between the two I think :)

SurferD


You will not be taxed as a US based investor, they require you to fill out a W8 form to determine your domicile for taxes (see here).


Thanks Micks,

That link does not give me confidence in this issue though as it is basically saying if you are a NRA then you complete a NR-8 and then they will apply the treaty tax rate and if not you get 30% tax applied. "Generally, tax is withheld at a rate of 30% on payments of US source stock dividends and substitute payments in lieu. The rate of withholding may be reduced if there is a tax treaty between your country of tax residence and the US."

Just to note I know Australia has a tax treaty with the US as has been mentioned on here before out but for now personally I am considered a non-resident of Australia for tax purposes for any earnings outside of Australia ie: all earnings are treated as tax free currently (except earnings in Australia) so this does not help me being an expat in UAE currently..hmmm the conundrum continues :oops:

This does not seem to support the principle of non-US linked investments we are looking for so I wonder now if IB is the correct brokerage to go through..anyone else have any thoughts or experience with this and IB? Is TD direct in Lux the best option for NRAs?

SurferD

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by Tylenol Jones » Mon Apr 27, 2015 12:37 am

@ SurferD

30% or other treaty tax is relevant only if you hold US-domiciled ETFs. If you open account with IB and you hold, for example, VUSD or VWRD at LSE you will have no dividend tax due since you are holding non-US-domiciled ETFs (simplified statement; depending on ETF's holdings there might be some smaller amount of tax taken at the source before you receive your dividend). The only worry with IB and other US brokers for you is estate tax but again only if you hold US-domiciled ETFs. There is nothing really to worry about if you are holding, for example, Ireland-domiciled ETFs at LSE. The only risk you are taking with holding non-US-domiciled ETFs through IB is that (according to Ted) if you die, your family will have to go through a bureaucratic process with IRS and broker which can last up to a year. I'm fine taking that risk especially given IB's lower fees, 500K SIPC insurance, and the fact that I have no clue how long it would take to do legal transfer of your assets in case of your death in a random EU country where an European broker is based.

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Re: Which brokers trade dollar listed ETFs on London Stock

Post by SurferD » Mon Apr 27, 2015 4:58 am

Tylenol Jones wrote:@ SurferD

The only risk you are taking with holding non-US-domiciled ETFs through IB is that (according to Ted) if you die, your family will have to go through a bureaucratic process with IRS and broker which can last up to a year. I'm fine taking that risk especially given IB's lower fees, 500K SIPC insurance, and the fact that I have no clue how long it would take to do legal transfer of your assets in case of your death in a random EU country where an European broker is based.


Thanks Tylenol for clarifying that and I agree if that is the only real risk then it is certainly leaning again towards IB as the brokerage of choice for NRAs.

I guess we can always view the "work" required by family members to get the estate tax issue sorted when we depart as fair...as after all as the old saying goes "Nothing is free" and so it will be for them to get their hands on our hard earned invested savings :) which didn't get to spend ..so seems fair to me :wink:
Regards
SurferD

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Re: Which brokers trade dollar listed ETFs on London Stock Exch

Post by Tylenol Jones » Wed Sep 16, 2015 2:42 am

Swissquote has made their offering more competitive

https://www.swissquote.ae/expatriate-banking-services

Multi Assets Custody Account with all-in-one fees of 0.1% of deposited assets (min. 60 USD/max. 200 USD/per year.)

Multicurrency bank account: USD, EUR, CHF, GBP, ZAR, AUD, RUB

As an expatriate, you benefit from above-average interest rates:

0.75% p.a. for your cash deposit from 0-50’000 USD

0.50% p.a. for your cash deposit exceeding the amount of 50’000 up to 100’000 USD

orenplen
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Re: Which brokers trade dollar listed ETFs on London Stock Exch

Post by orenplen » Wed Apr 19, 2017 3:33 pm

I'm fine taking that risk especially given IB's lower fees, 500K SIPC insurance
Hi,

I'm sorry for raising the same issue in several posts, but I think it's in the best interests of everyone here.
I am in the same position as you guys- not a US citizen, investing via IB in Irish-domiciled ETFs, in order to avoid US estate tax.
However, I recently found out that one of the huge advantages of investing in IB, namely the 500K USD protection of SIPC is IRRELEVANT when it comes to non american ETFs. These ETFs are probably (although I'm not 100% sure) protected by the British equivalent of FSCS of only 50K GBP

Hence, I am currently struggling with the decision of what to do.

Would love to hear your thoughts on this.

Thanks.

Maple
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Re: Which brokers trade dollar listed ETFs on London Stock Exch

Post by Maple » Thu Apr 20, 2017 12:21 am

orenplen wrote: Hi,

I'm sorry for raising the same issue in several posts, but I think it's in the best interests of everyone here.
I am in the same position as you guys- not a US citizen, investing via IB in Irish-domiciled ETFs, in order to avoid US estate tax.
However, I recently found out that one of the huge advantages of investing in IB, namely the 500K USD protection of SIPC is IRRELEVANT when it comes to non american ETFs. These ETFs are probably (although I'm not 100% sure) protected by the British equivalent of FSCS of only 50K GBP

Hence, I am currently struggling with the decision of what to do.

Would love to hear your thoughts on this.

Thanks.
I specifically asked IB customer support about this via online chat. It seems (according to the service rep) the insurance covers IB LLC accounts, regardless of the domicile of the investments or the domicile of the account owner. In case other board members may find this useful, I included a chat transcript below, modified only to protect my identity:

------------------------------------------------------------

Candace C: Hello, this is 'Candace C'. How may I help you?
me: Hello Candace.
me: I have a question about Securities Investor Protection Corporation (SIPC) asset protection at IB.
me: Does SIPC cover IB accounts of non-USA residents?
Candace C: Your account is opened under IBLLC
me:
https://www.interactivebrokers.com/en/i ... _entity=uk

Candace C: Customer securities accounts at Interactive Brokers LLC are protected by the Securities Investor Protection Corporation ("SIPC") for a maximum coverage of $500,000 (with a cash sublimit of $250,000) and under Interactive Brokers LLC's excess SIPC policy with certain underwriters at Lloyd's of London 1 for up to an additional $30 million (with a cash sublimit of $900,000) subject to an aggregate limit of $150 million.
Candace C: you may refer to this page
https://www.interactivebrokers.com/en/i ... ngth&p=acc

me: I read the above link, but it was not clear to me whether the coverage was for USA residents only.
me: Ok, so all accounts are covered?
Candace C: All IBLLC clients
me: Thanks for the confirmation.
me: I have another question regarding the aggregate coverage limit of $150 million.
me: Is the $150 million aggregate across all accounts for all account owners at IBLLC? Or is that aggregate for all account of a single account holder?
me: ?
Candace C: all accounts at IBLLC
me: Thanks for the clarification.
me: Final question on this subject ... Does the insurance coverage also apply to IBLLC account assets which are invested outside the USA, for example on foreign exchanges such as the London Stock Exchange?
Candace C: Yes
me: Thanks again for the information. Have a good day.

orenplen
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Re: Which brokers trade dollar listed ETFs on London Stock Exch

Post by orenplen » Thu Apr 20, 2017 12:59 am

I specifically asked IB
I did that as well and once got the same answer but in the second time they specifically told me that SIPC does not cover non-US etfs.

I wrote to IB again and got the same answer, the european ETFs are only covered by the Lloyds insurance, which is basically no protection, because of the very very low aggregate limit.

I wrote to SIPC themselves and they told me that in order for an ETF to qualify for SIPC protection, it has to:
1. Be held via an SIPC covered broker, which is OK, since IB are regulated by SIPC (although im not even sure about that, because IB LLC might be buying the ETFs via their brithish derivative IB UK, which is not member of SIPC of course).

2. The ETF must be registered under the SEC, which of course the Irish ETFs are not.
Just to make sure, i talked directly to blackrock which clarified that indeed they are not regulated by the sec, but by UCITS.

ExpatChris
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Re: Which brokers trade dollar listed ETFs on London Stock Exch

Post by ExpatChris » Thu Apr 20, 2017 9:43 pm

Orenplen,

I believe that you are correct about the Irish based products not being covered by SIPC.

IB is publicly listed on the NYSE. Are you concerned that it could default that quickly without you knowing about it? If you owned VUSD or VWRD, wouldn't those shares still belong to you and not be considered separate from IB's own assets?

I do not believe that your funds would be insured with most European banks either.

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