I have just opened a SIPP on FT. Just wanted to know if I will be at a disadvantage if I invest in US stocks. If so how big a disadvantage is it.
No disadvantage. In fact you have an advantage with US stocks that pay dividends as these will be subject to a 0% tax inside a UK SIPP.
Currency fluctuations may impact your investment eg. the pound weakens against the dollar ( or vice versa )
Good point. Also in addition to your point we shouldn’t forget that there is a Forex charge.
Interestingly SIPP rules allow the holding of Foreign currency - not that I know any SIPP provider that lets you do this.
Buying the US stock is disadvantaged in a Freetrade SIPP because they don’t support 0% withholding tax.
So all US shares still have withholding tax applied. Something that you need to consider if your looking to use Freetrade over other providers which do support 0% tax
This just seems insane that they don’t do this as it is an easy gain for the FT customers! Maybe there is a good reason but can’t for the life of me see what it could be.
I don’t think they’ve ever said, so it’s all speculation. My only guess is either the provider doesn’t support it, the provider does support it but it costs freetrade to much money, or they do support it but it would take to long to integrate and cost to much to run
I may remember wrongly but pretty sure someone at FT did comment they had not realised this on a previous post when this was brought up. Surely though it is a simple law/rule and shouldn’t matter what company is managing it.
Maybe I am missing something but it seems a no-brainer to me.
Edit - Adam made the comment here, or at least the comment is a reply to it.
I asked about it repeatedly before the SIPP was launched, if I remember right I eventually got an answer from their in app chat was was basically no they don’t support it
Ok. Thanks all.
Does anyone know if FT are going to change their not supporting 0% tax policy. It seems ludicrous to pay it when you don’t have to
@kizz to be clear we are talking here about dividends. It may be that you are not investing in dividend stock and/or you may be investing in Accumulating ETF’s - so in effect any dividend withholding may have zero impact on you.
To answer your question directly: FT does not have a policy not to support this - from the linked message above we can see that this something to do with the administrator used by FT. So if you are interested you should email FT directly and ask them when they will, if ever, support 0% withholding.
As an aside, the US government provides a form for individuals to directly reclaim withholding. Googling will lead you to it.
Thanks @bitflip , that has cleared things up for me. I will not be specifically targeting income stocks for my pension so it should not be to much of an issue.