IB - which jurisdiction?

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shano

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I'm tax resident in the UK, but am non-domiciled here and so am not required to pay tax on gains outside of the UK (subject to remittance).

With an Interactive Brokers account, even if it's opened in the UK I'm required to fill in US declarations (W8-BEN), so are any transactions in that account considered to be in the US or in the UK? Are the funds in this account stored in the UK (and so have been remitted in the UK)?

Alternatively, how difficult is it for a UK resident to open and fund a direct US account rather than a .co.uk one?

Cheers,

Shano
 
My understanding is that the W8-BEN form is to prevent you being taxed by the US on any gains that you make. I expect that you will have to declare your profits to wherever you are considered domiciled.


Paul
 
Thanks Paul, that's my understanding too with regards to the US end, but I'm now trying to determine whether or not and for how much I get taxed in the UK.

I'm a Kiwi, but am tax-resident in the UK. As a non-domicile I only need to declare to the Revenue any gains earned overseas to the extent that they are remitted back to the UK. They're strange laws, and as far as I can tell only the UK and Ireland have them, but in effect it means that any gains I make overseas may not be taxable in any jurisdiction as I am not required to furnish a NZ tax return because I'm not tax-resident there.

However, if the IB account is situated here in the UK then by default all gains appear to have been transmitted here and so I'll be liable in the normal way to all gains. It's this bit I'd like confirmed if possible.

Shano
 
Dunno if this helps?

From IBs FAQ on Tax:

Tax Information and Reporting

As a resident of the UK, for my tax purposes solely, can I elect to open an account with IB US directly and bypass opening an account through IBUK?
If you are a UK resident you can only open an account with IBUK. Although, your client money will always be held by Interactive Brokers LLC, in the US.

does this mean that your IB account is effectively a black box and any deposits equate to capital and withdrawals equate to capital gain (or cash as a result of)?

Matt
 
shano said:
I'm tax resident in the UK, but am non-domiciled here and so am not required to pay tax on gains outside of the UK (subject to remittance).

With an Interactive Brokers account, even if it's opened in the UK I'm required to fill in US declarations (W8-BEN), so are any transactions in that account considered to be in the US or in the UK? Are the funds in this account stored in the UK (and so have been remitted in the UK)?

Alternatively, how difficult is it for a UK resident to open and fund a direct US account rather than a .co.uk one?

Cheers,

Shano
Click to expand...

I am exactly in the same situation as Shano. Has anyone found the answer?

Tempestad
 
Better still open your account based on IB's Hong Kong office if you can. You never know when laws will change so the better your separation the safer you'll be.
 
nine said:
Better still open your account based on IB's Hong Kong office if you can. You never know when laws will change so the better your separation the safer you'll be.
Click to expand...

Hi nine,

That sounds like a very interesting possibility. However, I'm not sure whether I'm able to open an account when IB Hong Kong, since, for instance, all UK residents are required to open their accounts with IB UK.

Do you know a web page to open an account with the Hong Kong branch?

Tempestad
 
so if your money is held in the USA and you just stick your profits in a US bank account , how can the UK tax man ever get his hands on it ?
 
Shano, since you don't have to do a tax return for the NZ state, why don't you open an IB account using your NZ home address?
 
Well in that case of course you'll want to stick to the straight and narrow and not suggest that you're going to do anything that somebody in the HMRC's internet monitoring dept might want to file against your name.
 
Re: Dunno if this helps?

innovation said:
From IBs FAQ on Tax:

Tax Information and Reporting

As a resident of the UK, for my tax purposes solely, can I elect to open an account with IB US directly and bypass opening an account through IBUK?
If you are a UK resident you can only open an account with IBUK. Although, your client money will always be held by Interactive Brokers LLC, in the US.

does this mean that your IB account is effectively a black box and any deposits equate to capital and withdrawals equate to capital gain (or cash as a result of)?

Matt
Click to expand...

So does anybody know if we can trade with a UK Interactive Brokers account while being non-dom and not paying any taxes if we don't remit that money? Does it have to do with the products we trade (I only trade US products)?
 
I found this a while back, but some question if this is enough:

Tax: UK Persons and Entities: UK Residents IB Accounts | Knowledge Base

ibkr.info ibkr.info

Tax: UK Persons and Entities: UK Residents IB Accounts​

Residents of the UK, EU countries and other select countries (i.e., Switzerland) may only open an account with Interactive Brokers (UK) Limited, irrespective of where you are domiciled. For your reference, Interactive Brokers (UK) Limited acts as an arranger for Interactive Brokers LLC. Interactive Brokers LLC holds clients funds and assets.
Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.
 
There's also this specific exclusion in the UK tax code for brokers to the remittance rules for non-doms: https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm34040

Example 1

Chandra, a remittance basis user, engages an investment manager based in the UK to manage her portfolio of investments in foreign stocks and shares of overseas concerns. Payment for this service is made from Chandra’s Guernsey bank account (containing her foreign income) to the investment manager’s Jersey bank account.

The service - the management of the portfolio - is provided in the UK to Chandra. However the service relates wholly to property outside the UK and payment has been made to a bank account held outside the UK. Both Condition A and Condition B RDRM33100 of the service exemption are met and therefore the payment for the services will not be treated as a remittance to the UK.
 
pumpkin888 said:
There's also this specific exclusion in the UK tax code for brokers to the remittance rules for non-doms: https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm34040

Example 1

Chandra, a remittance basis user, engages an investment manager based in the UK to manage her portfolio of investments in foreign stocks and shares of overseas concerns. Payment for this service is made from Chandra’s Guernsey bank account (containing her foreign income) to the investment manager’s Jersey bank account.

The service - the management of the portfolio - is provided in the UK to Chandra. However the service relates wholly to property outside the UK and payment has been made to a bank account held outside the UK. Both Condition A and Condition B RDRM33100 of the service exemption are met and therefore the payment for the services will not be treated as a remittance to the UK.
Click to expand...
Hiya @pumpkin888



Thanks. I didn't get this properly. Does this mean if the portfolio manager has a UK bank account for receiving the portfolio manager's income or the portfolio manager trades the UK-related security e.g. GBP/USD or both, will Chandra pays any UK tx on profits ears?


Tnx and best of luck
 
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