IB Application


Established member
IB Applicatin

I am in the process of trying to complete my application with IB and have come to a dead end on the tax forms. I am based in the UK and will probably wish to trade the ESTX50 and ES.

I am lead to believe I should not be liable for any US tax but do not know which if any of the W 8 forms apply to me. If anyone has recently signed up with IB can you help as to the selection if any I should make.

Below is a copy of the W 8 page that my application menu displays I need to complete.


If you are you subject to US taxation or tax reporting please click 'YES I am subject to US taxation or tax reporting' button, otherwise follow the instructions.

The following is a brief summary of the United States Internal Revenue Service ("IRS") Forms W-8BEN, W-8IMY, W-8EXP and W-8ECI that Interactive Brokers LLC is required to receive from its non-United States accounts. You may not rely upon the below summary but must, instead, rely on the IRS instructions applicable to each IRS Form and/or your independent tax advisor. You are responsible for the submission of the appropriate IRS Form. In addition, please note that Interactive Brokers LLC will not be able to maintain an account for any person or organization for whom Interactive Brokers LLC would be required to withhold taxes. Accordingly, the IRS Forms W-8BEN, W-8IMY, W-8EXP and W-8ECI have been designed for submission by only those accounts for whom Interactive Brokers LLC would not be required to withhold taxes.

Please choose the appropriate IRS form below by clicking the appropriate link; complete the appropriate W-8 form online; and submit the completed form to Interactive Brokers.

IRS Form W-8BEN To access this form click here.
Interactive Brokers LLC must receive IRS Form W-8BEN from any foreign person or organization to which IB makes payment if such foreign person or organization is the beneficial owner of the income, whether or not it is claiming a reduced rate of, or exemption from, withholding. The beneficial owner must enter its U.S. Taxpayer Identification Number ("TIN") if it is a beneficial owner that is claiming benefits under an income tax treaty. A TIN is not required to claim treaty benefits for (i) dividends and interest from stocks and debt obligations that are actively traded; (ii) dividends from any redeemable security issued by an investment company registered under the Investment Company Act of 1940 (a mutual fund); (iii) dividends, interest, or royalties from units of beneficial interest in a unit investment trust publicly offered and registered under the Securities Exchange Act of 1933; (iv) income related to loans of any of the foregoing. Interactive Brokers must also receive IRS Form W-8BEN when a payee claims an exception from domestic information reporting as a foreign person or to establish that certain income is not effectively connected with the conduct of a U.S. trade or business.

IRS Form W-8IMY To access this form click here.
If you receive income on behalf of another person, then you are considered to be an intermediary under U.S. tax law. An intermediary who receives income from Interactive Brokers must pay such income to either the beneficial owner of the income or to other intermediaries. Interactive Brokers must receive IRS Form W-8IMY from any person that is an intermediary. If you have elected to become a Qualified Intermediary (see instructions) and do not have U.S. nonexempt recipient clients (see instructions) you must submit a completed IRS Form W-8IMY to Interactive Brokers.

Please note that Interactive Brokers will not be able to conduct business with an intermediary that requires Interactive Brokers to withhold taxes. This means that Interactive Brokers may not maintain an account for a non-Qualified Intermediary, Foreign Partnership or Foreign Trust.

Accordingly, if you are not a Qualified Intermediary, please call the Interactive Brokers Help Desk at 1-877-442-2757 (if you are in the United States) or at 1-800-0084-0084 (if you are located outside the United States) immediately and provide your account information. The Interactive Brokers Help Desk will relay this information to the Interactive Brokers Compliance Department for further handling.

IRS Form W-8ECI To access this form click here.
Interactive Brokers must receive IRS Form W-8ECI from any foreign person or organization to which Interactive Brokers makes payment if such foreign person or organization is the beneficial owner of the income, and such foreign person or organization claims that the income is effectively connected with a U.S. trade or business within the U.S. The foreign person or organization must enter a U.S. Taxpayer Identification Number ("TIN"). If Interactive Brokers receives IRS Form W-8ECI, IB may treat all of the U.S. source income paid to the beneficial owner as effectively connected with the conduct of a trade or business within the U.S.

IRS Form W-8EXP To access this form click here.
Interactive Brokers must receive IRS Form W-8EXPfrom a foreign government, international organization, foreign central bank of issue, foreign tax exempt organization, foreign private foundation or government of a U.S. possession which claims exemption from withholding.

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Established member
Hi Def

By completing this form will it ensure that I am not liable to any US tax and only CGT on any profits that go above the threshold level.



Established member
Hi Helen, Def and thank you

I have eventually found the answer in the US IRS Instructions for form W-8BEN.

For anyone else who has to go through this **********LOL

income from broker proceeds are exempt providing you meet the requirements of an exempt foreign person for a calendar year which basically means you are a nonresident alien, have not or do not intend to be present in the US for a total of 183 days or more during the calendar year or that you are not engaged in or planing to be engaged in a US trade or business that has effectively connected gains from transactions with a broker or broker exchange.

This form once completed remains in force to the last day of the third succeeding calendar year providing your circumstances do not change making anything in your original from incorrect.

All forms for all US brokers are a pain, so it's not something which is peculiar to IB. It's all to do with money laundering and 9/11 didn't help either, so everything is now tight as a duck's you-know-what when it comes to money transactions between countries.

W8-BEN is definitely the right form that you need to complete as a UK taxpayer - it means that the US government will not deduct tax, but you will still need to declare your profits to the UK government on your tax form as CGT if they are over £7,500 per annum or thereabouts.


Established member
Hi Shimbleshanks

thanks for reply fortunately I managed to see this from the IRS instructions but can you assist re another matter.

With reference to CGT in order to be able to claim 2 x the allowance for myself and partner which would we be able to operate from an individual account in one name but the funds jointly owed, a single joint account or separate individual accounts.

regards Kevin
I believe the simplest is to have funds in separate individual accounts, then there is no opportunity for any misunderstanding to arise.

I don't believe you can have a joint account at IB, but even if you did you would need to make sure that this was acceptable by the IR and they seem to have a habit of changing their minds - in my experience they tell you one thing on the phone, but something else when it's in their favour.

I'm pleased to see that you are already banking on making more than £15,000 for the two of you on your trading activities! Nice one. :cheesy:


Established member
Hi Shimbleshanks

If your in this game then there is only one reason and IMHO that is to make money.LOL

Yes and no, Kevin.

I seriously believe that when you start off in this game your objective should be to remain in the game - quite a challenge when you consider that around 85% get wiped, and 10% break even. Only the 'old pros' who have been through the 2-3 year learning curve should be in the game to make money. That puts you firmly in the 'old pros' category Kevin, although by old I mean seasoned, not wrinkled. :cheesy:


Established member
Hi Shimbleshanks

Yes I would agree you do have a point, anyone starting out should look to consolidation and safety to start with as the knowledge improves. I have been at this 3 years now and my only misgiving is that I did not look to Futures before now. I spent to long with shares restricting my ability to trade the market in both directions I moved to spreadbetting for this on the lure of no tax but have come to realise that the odds are stacked against you. You are quite right to say that the first objective is to remain able to trade and allow you to develop a strategy that you can apply well and that does actually work more than it fails.

There was a time when I would have run a mile than trade the indicies but I have gone through Logica and Colt (in the heady days) Cisco, Intel and Microsoft the Dow and the FTSE. I now intend trading ESTX50 and ES (S & P e-mini futures)

So issues such as stop loss and money management should be high on the agenda before you look to profits.

I suppose I can take some comfort in the knowledge that after 3 years of trading, the last 2 daytrading through spreadbetting I am still in the game even if I did take the more difficult path. The future (sorry no pun intended) looks promising trading with futures because I have evened the odds and well placed to improve on what I have so far established.




If you traded US stocks you can "short" them and so be able to play the markets in either direction. In my view trading US shares is less risky than trading futures. I remember in March 2001 when the Fed made an unexpected interest rate cut, the Nasdaq future jumped up 350 points in less than 10 seconds. A friend of mine who was short on the Nasdaq with a 10 point stoploss got filled 150 points above where his 10 point stop was. By the end of the day the market was back where it had started before the announcement. On US shares I have never seen this kind of jump with that level of speed. Also if you trade the Nasdaq using direct access level II you would have time to get out long before any massive loss would have been incurred.



Established member
Hi Trader 333

I take your point unfortunately that is one of the risks of trading I have selected ESTX50 and ES for this purpose because they appear generally speaking not to move to fast but I realise that does not mean that they are not capable of jumping. As for shares the same can apply if a company produces a warning and during this bear market that has frequently happened I cant speak for US because most of my trading was in the UK but I recall Logica dropping the best part of 100p in a couple of mins.



Junior member
Hi Kevin,

I've traded the ES for over a year and the ESTX50 since December of last year. If you stay aware of the economic announcements, you are unlikely to have "surprises."

Since the Indices are made up of many stocks (technically there are 500 in the S&P though a few of the very large ones tend to move it) the bad luck of being "blindsided" by a CEO resignation or restructuring of income announcement is avoided.

Of the two contracts, ESTX50 seems to flow a bit smoother than the ES which can be "jumpy" and whipsaw you (especially if you run tight stops). Both have excellent volume with the S&P E-Mini the highest volume index contract traded and the ESTX50 the second highest. Except for the U.S. premarket/aftermarket for the ES, liquidity is never a problem.

I'd be wary of YM (mini-DOW) because of lower volume as it's a new vehicle. The spreads here can be very wide, especially when trading out of regular U.S. Market Hours.

I'd say that the NQ, on average, is more volatile than ES but there are many dedicated NQ traders who love the movement of this NASDAQ index contract.

Best of luck.


Established member
Hi Austin

Thanks for post - I am happy with ESTX50 and ES for different strategies both selected for the fact they are liquid and offer all round value in terms of spread, cost, margin , price range or movement.

As for the others they are not for me.


Junior member
Filling out the W-8BEN means the IRS will automatically send your info to HMRC similar to the EU savings directive? Can you choose to taxes be deducted automatically at source in the US instead? What US taxes are due on a trading account? Let's say I have a US address as well.
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