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For UK investors looking to broaden their horizons, US shares present an unparalleled opportunity. The American markets are a powerhouse, home to many of the world’s most influential and profitable enterprises. If you’re seeking innovation-driven growth, diverse sectors, and companies with a global footprint, buying US stocks from the UK offers significant advantages.
Accessing US shares allows UK investors to tap into the leading edge of global innovation, including companies at the forefront of AI, healthcare, and clean energy like Apple, Amazon, Microsoft, and Alphabet. With many UK brokers now offering commission-free trading and fractional shares, these dynamic markets are more accessible than ever through regulated platforms and low-cost options.
In This Guide
Why UK Investors Buy US Stocks
The appeal of US-listed companies goes beyond brand recognition. Many UK investors buy US shares to:
- Access high-growth sectors such as technology, biotech, and green energy
- Diversify away from the UK’s relatively concentrated market
- Access larger, more liquid markets with extensive analyst coverage
US equities also dominate global indices, so investors aiming to mirror world markets often include American shares by default.
Choosing a Platform to Buy US Shares in the UK
To trade US shares, you’ll need an investment platform regulated by the Financial Conduct Authority (FCA) that provides access to American markets. Leading UK brokers offering US stock trading include:
- Hargreaves Lansdown
- AJ Bell
- Interactive Investor
- Freetrade
- Trading 212
- eToro
Some of these platforms allow US shares to be held within a stocks and shares ISA, shielding them from UK capital gains and dividend tax. Others offer general investment accounts, often with fewer restrictions but less tax efficiency.
When comparing platforms, consider the following:
- Dealing commissions (some platforms are commission-free, others charge per trade)
- Foreign exchange (FX) fees when converting GBP to USD
- Custody or platform fees (usually charged monthly or annually)
- Access to fractional shares (helpful for buying expensive US stocks)
While some providers advertise zero commission, they may still apply FX fees on each trade or use wider currency spreads. The cheapest way to buy US shares in the UK depends on your trading frequency and investment size.
Setting Up Your Account: Step-by-Step
Before you can start buying U.S. shares from the UK, you’ll need to set up a trading account with a regulated broker. The process is usually straightforward, but it’s important to follow each step carefully to ensure your account is verified and ready to use. Below, we’ll walk you through the setup process so you can start investing in U.S. stocks with confidence.
Step 1: Choose a UK-regulated investment platform
Step 2: Set up and verify your account
Step 3: Fund your account and review FX charges
Step 4: Understand how to place your first trade
Step 5: Track your investments
Select a broker authorised by the FCA that offers access to US stocks. Compare fees, features, and whether the platform supports investing through a Stocks and Shares ISA or a general investment account.
Register online and complete identity verification by submitting documents such as your passport and a recent utility bill. During this process, most platforms will prompt you to complete a W-8BEN form, which reduces the US withholding tax on dividends from 30% to 15% under the UK–US tax treaty.
Deposit GBP from a linked UK bank account. Your platform will convert your funds to USD at the time of each trade, usually applying a foreign exchange fee of 0.5% to 1.5%. If available, consider using a platform that allows you to hold a USD balance to avoid repeated conversion costs.
Familiarise yourself with basic order types such as market, limit, and stop orders. Once your account is funded, you can search for a US stock, choose the amount to invest (including fractional shares if supported), and place your order during US market hours (2:30 pm–9:00 pm UK time, Monday to Friday).
Use the platform’s tools to monitor your portfolio, review dividend payments, and access tax summaries. Staying informed about the companies you invest in helps support long-term decision-making.
Understanding Orders and Market Access
Once your account is open and funded, you can begin placing trades during US market hours, which run from 2:30 pm to 9:00 pm UK time, Monday to Friday. Most UK platforms allow you to place several types of orders, each serving a different purpose depending on your trading strategy:
- Market orders: These execute immediately at the best available price. They’re useful when you prioritise speed over precision, but the final price may differ slightly from the quote, particularly in volatile markets.
- Limit orders: These execute only when the stock reaches your specified price or better. This gives you more control over the price you pay but doesn’t guarantee the order will be filled.
- Stop orders: Often used for managing risk, stop orders become market orders once a stock hits a set price level. They help automate selling if a stock moves against you.
- Fractional shares: Many platforms now let you purchase a fraction of a share, allowing you to invest in high-priced stocks like Amazon or Alphabet with smaller sums.
All US shares are priced in US dollars. While most UK brokers accept deposits in GBP and handle conversions at the time of the trade, this process usually involves foreign exchange (FX) fees. Frequent trading can therefore increase your costs due to multiple conversions.
Costs When Buying US Stocks from the UK
UK investors buying US shares face several types of fees:
- Foreign exchange fees: Often 0.5% to 1.5% per transaction.
- Dealing charges: Fixed per-trade fees (from £5 to £11.95 depending on platform).
- Platform fees: Annual or monthly fees for account access (e.g. £8.99 per month).
- Dividend withholding tax: Typically 15% if W-8BEN form is submitted; otherwise 30%.
Even small fees can reduce returns, especially for frequent traders or small portfolios. Platforms with fractional shares and commission-free trading may be more cost-effective for beginners, provided the FX fees are reasonable.
Tax on US Shares in the UK
When buying US stocks from the UK, two tax systems come into play: the US tax code and UK personal taxation rules.
US Withholding Tax
Dividends paid by US companies to UK investors are subject to 30% withholding tax by default. By submitting a W-8BEN form via your broker, this is reduced to 15%. This tax is deducted before dividends reach your account and cannot be reclaimed in most cases.
UK Capital Gains and Dividend Tax
- Capital gains tax (CGT): Basic rate – 10%, higher rate – 20% on gains above the annual allowance.
- Dividend tax: 8.75% to 39.35% depending on income band and allowance usage.
Holding US stocks inside a stocks and shares ISA or pension shields them from UK CGT and dividend tax, though US withholding tax still applies.
Currency Risks When Investing in US Shares
Because US stocks are priced in dollars, UK investors face currency risk. If the pound strengthens against the dollar, your investment value may fall when converted back to GBP, even if the stock itself rises in USD.
Currency movements can work in your favour too. Some investors view currency risk as an integral part of their diversification strategy. Others prefer to hedge currency exposure using specialist funds or ETFs.
Platforms that allow you to hold USD balances can help minimise the number of currency conversions, potentially reducing FX costs and risk.
Regulatory Protections
When investing in US shares through an FCA-authorised UK platform, your assets are protected under UK regulation. Client money rules and segregation of assets apply, and you may be eligible for Financial Services Compensation Scheme (FSCS) protection up to £85,000 in case of broker failure.
However, this protection does not cover losses resulting from market downturns or the failure of individual companies. As with all investing, capital is at risk.
Long-Term Strategy vs Active Trading
While some investors buy and sell US shares frequently, many UK-based individuals use them to build long-term portfolios. A common approach is to:
- Invest in a US equity index fund (e.g. S&P 500 ETF).
- Buy high-quality US dividend stocks and reinvest income.
- Hold US shares alongside UK and global equities for diversification.
Trading US stocks from the UK can offer broader opportunities, but it also carries the same risks as any equity investing.
FAQs
Can I buy US stocks inside a UK ISA?
Yes. Many platforms allow you to hold US-listed shares in a stocks and shares ISA. This shields you from UK capital gains and dividend tax, although US withholding tax on dividends still applies.
Do I really need to fill out the W-8BEN form?
Yes, this form helps reduce the US dividend tax from 30% to 15%, thanks to the UK–US tax treaty. Most brokers include it during setup, so it’s usually straightforward.
Are there any minimum amounts to invest in US shares?
No. With fractional shares, you can start investing from as little as £1. This is especially useful for high-priced stocks such as Amazon or Alphabet.
How are profits on US shares taxed in the UK?
Profits may be subject to UK capital gains tax if your gains exceed the annual allowance. Dividends are also taxable beyond the £500 dividend allowance, unless the shares are held in a tax-efficient wrapper like an ISA or pension.
Final Thoughts
Investing in US shares from the UK is now easier and more accessible than ever. With the right platform, an understanding of fees and tax implications, and a sensible investment strategy, UK-based investors can gain exposure to some of the world’s most dynamic companies.
Before trading, ensure your platform is FCA-regulated, complete the W-8BEN form, and verify the total cost of currency conversion, trading fees, and custody fees. US equities can be a powerful part of a diversified portfolio, but they are still subject to risk, including currency volatility and overseas tax implications.
For many UK beginners, starting with fractional shares via a low-cost platform inside an ISA offers a balanced way to get started. As always, investing in overseas shares involves risk. Currency fluctuations, regulatory differences, and unexpected company performance can all affect your returns.
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