US Investing and Tax

[uncleoinky]

Greetings all.

Just to briefly summarize the current situation or thinking..

1. Want to invest and will want to use US stocks (bigger market and a few already in mind). Have access to a US bank account.

2. Current capital is small (20k) and owner is prone to all eggs in one basket syndrome.

As far as I know, I don't have to pay tax as a non-US resident, although they will withhold dividends until I fill out the correct forms. I do have the option to have US shares in the name of a US citizen. Just generally unsure whether to settle for being hit for CGT against my personal income, if i can do something about it. Currency transfer and appropriate brokers (who) - recommendations concerning these would be appreciated.

Thanks in advance

 

[Timmy]

Greetings all.

Just to briefly summarize the current situation or thinking..

1. Want to invest and will want to use US stocks (bigger market and a few already in mind). Have access to a US bank account.

2. Current capital is small (20k) and owner is prone to all eggs in one basket syndrome.

As far as I know, I don't have to pay tax as a non-US resident, although they will withhold dividends until I fill out the correct forms. I do have the option to have US shares in the name of a US citizen. Just generally unsure whether to settle for being hit for CGT against my personal income, if i can do something about it. Currency transfer and appropriate brokers (who) - recommendations concerning these would be appreciated.

Thanks in advance

When you select a US broker, ask them about currency transfer from Aust. to the US; they will have specific requirements. There are very strict laws regarding this (anti terrorism and and anti money laundering related) and if you stuff it up it can be a nightmare to sort out.

Interactive Brokers is very popular here with futures traders, not sure if they will do equities for you though; worth asking them.

 

[-Bevo-]

You can buy US Stocks using a Australian Broker like Comsec the brokerage fees would be a killer although if your just planning to buy some stock to hold this probably wouldn't be a problem not sure how comsec deal with currency.

If you wish to be more active a broker like Interactive Brokers is the go easy to setup you wont need a US bank account just any bank here in Australia will do just set your base currency to AUD when you purchase US Stock you can either purchase USD or Borrow USD which is the default and the Brokerage fees are as little as 1 dollar for a active trader with a small account its definitely the way to go.

 

[uncleoinky]

Bevo - The IB currency exchange, is it reasonable, or does it try to take a hefty margin on the transfer? IB seems to be a favourite here. Timo - futures options are probably better for someone like me with limited capital, though I am looking at long time options (6m-1yr). An additional question regarding options when exercising.. is it possible to regain any of the premium if you paid if exercising early enough (and how).

Another call out for someone who invests overseas and idea on what is the go with tax. I have read the ATO site that says something like having to pay tax on the investment (foreign) value itself, prior to even making anything - hope I misread that.