Buying Overseas Shares - Is it Possible?

While London's stock market provides exposure to the world with many British companies deriving their earnings overseas, the stocks of some individual companies that may be attractive to investors are unavailable on the London Stock Exchange (LSE).

Heavy hitters such as Amazon, BMW & Samsung are not listed on the LSE.

It's much easier than it has been in the past for individual investors to gain exposure to these individual stocks.

Buy in pounds

It's now possible to invest in overseas shares through a SIPP (self invested personal pension) or ISA (individual savings account), which means that you will pay for the transaction and also the conversion of foreign currency due to the fact that your accounts will be pound denominated.

Open an account in another currency

This option will allow you to avoid the conversion charges on each transaction if the currencies between your investments and your account match, however, your account will be exposed to the risk of currency movements. You can only do this through a SIPP or unwrapped account as non pound denominated ISAs are not currently available.

Tax issues

There could be tax implications for overseas shares. Some countries will have a "double-taxation agreement" meaning that you should not have to pay tax in both jurisdictions at once. Individual countries also have their own administrative procedures. A W-8BEN form would be required for example if you wish to invest in US shares.

Dividends

The US market in particular is known for a large number of well known names that pay dividends such as Coca Cola, Johnson & Johnson and Proctor & Gamble. Be aware that these dividends will need to be converted to sterling, resulting in a charge.

Buy funds that invest in global shares

Funds that invest in overseas are an easier option, reducing your exposure to currency fluctuations and having to choose the funds individually.

Remember that it's important to invest in a diversified fashion and that holding too much of your money or investments in one sector, commodity or geographical area is not recommended.

Westminster Wealth Management can assist in helping you to navigate your financial future, and expert advice is valuable in complicated times just as much as in simple ones. Contact us today.

The value of investments and income from them may go down as well as up and you may not get back the original amount invested.

Information is based on our current understanding of taxation legislation and regulations which is subject to change.

Past performance is not a reliable indicator of future performance.

A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation

Back