As you know, IB LLC is based in the US, but they own a subsidiary in the UK (IBUK). I am a national of an EU country, but I live outside the EU, the UK, and the USA. All of my assets are Irish-domiciled. I would be grateful for suggestions and information related to the following questions, which I'm sure must also affect a lot of other people.
Where is my broker account domiciled?
Are my purchases handled by IB LLC or by IBUK? Does this matter in practice?
Are my assets held by US custodians or by UK custodians?
This must have important practical implications that are difficult to foresee for me.
What kind of broker-failure insurance do I have?
American IB customers are covered by SIPC up to $500,000. But am I covered by the American SIPC, or by the UK FSCS? This matters a lot, because FSCS only insures up to 85,000 GBP.
The IB website says:
This suggests that my assets are covered by SIPC and not by FSCS. But how to make sure? What does it mean for an account to be 'cleared and carried'? Does this clearance and carriage entail that my assets are insured by SIPC? What are those 'certain limited products' that are 'cleared and carried' by IBUK?United Kingdom
Interactive Brokers (U.K.) Limited
Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Conduct Authority. FCA Register Entry Number 208159. Products are only covered by the UK FSCS in limited circumstances.
Your account is cleared and carried by Interactive Brokers LLC and for certain limited products by Interactive Brokers (U.K.) Limited. Interactive Brokers LLC is regulated by the US SEC and CFTC and is a member of the SIPC (www.sipc.org) compensation scheme. Interactive Brokers (U.K.) Limited is authorised and regulated by the FCA and regulated products are covered by the UK FSCS.
Is it even possible that my savings aren't insured at all in the event that the broker goes bust?
The following questions only matter if my assets do turn out to be held in the UK.
I don't live in the UK, and anyway there's a more-than-sufficient capital-gains exemption of £12,300. So I guess I wouldn't pay capital gains tax. But what about taxes on interest and dividends? My ETFs are accumulating, but I don't think that matters in the UK.
The UK has an inheritance tax. If my assets grew enough to hit the limit, would I need to worry about it?