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Trader126

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About Trader126

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  1. IG operates in Switzerland; they have registered offices there. I wonder if the new rules prohibit IG from taking on UK clients via their Swiss arm. Can anyone confirm this?
  2. I'm eager to see a working example of the 50% close-out rule. There's very little information anywhere about it, let alone a breakdown of how it would work in practice. I'd like to start planning how I'm going to work around it. I'm guessing IG haven't finalised the details of how they'll implement it yet, so can't provide detailed explanations for us. Until then, I sit and wait.
  3. Trader126

    Collateral service expansion

    Now that is interesting. Can you confirm this to be the case, ?
  4. Trader126

    Collateral service expansion

    Thank you .
  5. Hello, As far as I'm aware, your collateral service is only available with a share dealing account. With the leverage restrictions from ESMA due to come into force in a few months (and I'm hoping there's a legal challenge from the brokers to halt/prevent these punitive restrictions), would you consider expanding your collateral service to your Smart Portfolios? As I would much rather open a Smart Portfolio ISA with IG and use the capital as margin on my spread betting account, as opposed to cashing in interest-bearing assets just to sit in my spread betting account as dead money.
  6. I've been wondering how the 50% close-out rule would actually work in practice too, especially how the use of stops could be used to mitigate its effects. A breakdown and example would be very useful in understanding this.
  7. Hello Ludwik, Thank you very much for your explanation. It confirms what I thought was the case but couldn't find in writing anywhere to know for sure. You've clarified everything I wanted to know. :smileyhappy: Perhaps your explanation could be used on the IG Support Portal to help others too. Many thanks!
  8. Don't all rush at once! :smileywink: That was a very long post so put simply: how does withholding tax affect dividend adjustments on US shares? I'm guessing that this is a mystery I'm only going to learn after the fact. For now, I'll carry on trading US shares and see what happens. Wish me luck! :smileysurprised:
  9. Hello, I hope someone can explain this to me because I've searched high and low for the answer online and on IG's website and community to no avail. So I emailed the help desk but their reply only confirms what I already know and doesn't explain what I don't. Regarding shares and indices, I understand (or at least I believed I did) that dividends paid on a spread betting position will be automatically adjusted as a 'dividend adjustment' on my account. When a stock/index pays a dividend, its price will be affected by the dividend payment and hence my P&L will be affected. To offset this gain or loss, IG will make a dividend adjustment into my account by the same amount of points the underlying stock/index has changed. Meaning I'm not materially gaining or losing from dividend payments, so wouldn't acquire any tax liabilities for them. My confusion arose after I opened a spread bet on a US equity for the first time and was emailed by IG requesting my urgent completion of a W-8BEN form: "You recently opened a position on a US equity, without being documented with a W-8BEN or W-9 form. This means that your position is subject to withholding of tax of up to 30% on any dividends, along with a potential admin charge of $50. This is because of new regulations that came into effect on 1 January 2017, under Section 871(m) of the US tax code, which treat ‘dividend-equivalent payments' on US equity derivatives – including spread betting and CFDs – as US-source dividend income. An individual would be subject to 30% withholding tax under normal US rules. However, a US-UK tax treaty exists which entitles a UK tax resident to pay only 15% of the tax. What do I need to do? Please complete the correct form as soon as possible to avoid paying unnecessary tax and admin charges. The amount of withholding tax you'll pay on your dividends could reduce from 30% to 15%." To me, that reads as though I will receive an income from dividends and as such do have to pay tax on that income, at least on US equities. Not only does this throw up questions on the tax implications of spread betting but how my P&L would be affected by dividends and withholding tax. As far as my lay understanding of other forms of withholding tax goes, it is deducted at source, hence the name. If that's the case here and I receive dividends less the withholding tax, I still don't understand how my P&L and account balance would be affected in this scenario (left with a gain/loss?). Is there a knowledgeable person able to clarify all of this for me please? As any mention of tax in a query to IG results in being advised that they're not regulated to give tax advice. Many thanks in advance.
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