How to buy US shares in the UK

Below are the steps you need to follow to invest in US shares with us:

Why should you buy US shares?

You may want to buy US shares because North America is home to the biggest stocks in the world. The United States accounts for nearly 60% of the global stock market,¹ which makes it appealing to many to invest in.

Generally, US stocks tend to attract a lot of interest around factors such as share price performance, new developments, economic reports, and market sentiment. Depending on how they’re performing, you’d buy and own US stocks in hopes that their value would be higher at some point in the future.

If the value appreciates over time, you can sell the shares for a profit. The opposite is also true. If the value depreciates over time, you’ll incur a loss.

Some investors buy US shares to earn a passive income in the form of dividend payments (if the company grants them). The dividends can be reinvested into the company, which means you buy more shares in the stock, effectively at no cost.

The popularity of American stocks, which spans across different sectors, also attracts global investors looking to diversify their portfolios. It may be difficult to buy shares in every listed US company. But, you can get exposure to Standard & Poor's 500 (S&P 500) exchange traded funds (ETFs), for example, that track a basket of stocks through a single position.

You’ll have to monitor factors that may cause the US market to go up or down. Some of these macroeconomic factors include wars or other conflicts, changes in inflation and interest rates, supply and demand, government fiscal and monetary policy, natural disasters or extreme weather events, as well as regulation or deregulation.

Before you buy stocks or ETFs, it’s important that you do your research as part of your own due diligence. You can do that through both fundamental and technical analysis to assess the asset’s historical price performance and to get a sense of how the price action might likely fare in the future.

Over the last 25 years, major US stocks have performed relatively well. The average total yearly return (including dividends) of the S&P 500 is around 9%.² You could choose to invest in individual stocks within the S&P 500 or invest in an ETF which tracks all the index’s shares in a single position. With ETFs, you’re diversifying your exposure and spreading your risk – which is typically less volatile than a single stock.
That’s because if a single stock underperforms, the rest of the basket may perform considerably better to counterbalance the drop – this isn’t possible in an individual company investment.

For example, a look at an index like the S&P 500 (the US 500 on our platform), which comprises 500 of the largest US companies, can support your decision to either get diversified exposure or not. Historical data shows that the S&P 500 appreciated in value over a 25-year period, with the share price having more than quadrupled since 1999 (as at 2024).

Note that past performance is no guarantee of future results.

Why buy US shares with us?

Below is a list of the key reasons to consider buying US shares with us.

• Low costs and best possible price: active traders won't get lower commission on US shares anywhere else. Pay zero commission on US shares with us, and a forex conversion fee of just 0.5%³
• Wide range of shares to choose from: pick from more than 13,000 leading global shares available on our platform to buy and hold
• 24-hour support: contact us via email, phone, live chat or X (formerly Twitter) to get in touch with our knowledgeable support team around the clock
• Ease of access with mobile app: open, monitor and close your positions from anywhere using our interactive mobile app
• Tax benefits: invest in individual savings accounts (ISAs) and self-invested personal pensions (SIPPs) with us and pay zero tax⁴
• Out of hours: experience our unique offering and seize the opportunity to invest in a number of US shares while the market is closed
• Execution speed: use our award-winning platform⁵ to take advantage of our fast execution speed to get the best price⁶

5 steps: how to buy US shares
in the UK

1. Open a share dealing account
2. Complete a W-8BEN form
3. Learn about the risks and charges
4. Find your preferred US shares
5. Buy US shares

1. Open a share dealing account

You’ll need to open a share dealing account with us to be able to buy US stocks on our platform. For optimum convenience, you can choose whether you want to open your investment account through our website or mobile app.

After you complete the application process, you can fund your account whenever you’re ready to start buying US shares. We have more than 13,000 shares, funds and investment trusts that you can choose from. You’ll need to do your research on the shares you want to get exposure to before you open a position.

Open a share dealing account with us

2. Complete a W-8BEN form

As part of the requirements for buying US shares, you must complete a W-8BEN form. This condition is stipulated by the American Internal Revenue Service (IRS). You can complete the form online on our platform once you have an account – there’s no need to download it.

The purpose of the W-8BEN form is to confirm that you’re not a US resident. It enables us to process your tax benefit on your behalf – a reduction of up to 30% in the amount of US tax you’re charged on dividends from the US shares you buy.

3. Understand the risks and charges

When you buy US stocks via our share dealing account, you’ll need to put down the full value of the position size upfront to get exposure. This will be the extent of your risk. Which means that you cannot lose more than your initial capital outlay if the market moves against you. This is different to leveraged trading, whereby you could lose substantially more than your initial outlay.

Oftentimes, our low dealing cost is amongst the reasons why UK investors choose to buy US shares with us. When you place three or more trades in the previous calendar month on US shares, you won’t pay any commission with us.² Otherwise, you’ll pay a standard charge of £10 per trade.

Note that charges involved in buying US shares differ if you place your trade over the phone. We charge £50 when you buy US shares over the phone.

4. Find your preferred US shares

You can choose from hundreds of popular US shares, such as Amazon, Tesla Motors, Meta Platforms, Apple and Alphabet. Finding your preferred stock is made simpler by our ‘finder’ panel. All you have to do is enter the name of the US shares you want to buy and search.

Our share dealing platform also provides investors with key market insights and tools that you can use to support your decision to buy a particular stock. These include trading charts, signals, alerts, client sentiment, technical indicators and analytics.

5. Buy US shares

To buy US shares, you must ensure that your account is funded. You can do that via the desktop, browser or mobile version of our platform. To gain access to the platform, you’ll log in to input your username and password. Then, head over to the finder panel and search for the stocks you want to buy.

Thereafter, you’ll choose whether you want to buy the shares at the current market price or if you want to set an order to buy the shares at a specified price. A limit entry order, for example, sets the price you’re happy to pay and executes automatically when the price level is hit.

6 factors to understand before investing in US shares

1. Learn about US stock market indices
2. Company earnings’ release times
3. Market opening hours
4. Foreign exchange risk
5. Accounts and tax wrappers
6. W-8BEN form

1. Learn about US stock market indices

Instead of buying a single US stock, you can track the performance of a group of shares from an exchange. With indices, you’ll get exposure to an entire economy or sector through a single position. This asset class provides better security against market risk compared to a single stock.

With us, you can speculate on the market price of indices that track some of the most popular US stocks, including the DJIA (Wall Street), NASDAQ 100 (US Tech 100), and S&P 500 (US 500). Some investors may seek specific exposure, such as US value in the form of an ETF rather than just generic indices exposure. One of the popular choices is the iShares Edge MSCI USA Value Factor UCITS ETF, which tracks the investment results of an index that consists of mid- and large-capitalisation stocks in the US.

2. Company earnings’ release times

Generally, US companies release their earnings reports after the market closes. This is done to provide investors with an opportunity to analyse the results, and subsequently take a position supported by the findings.

It’s important to do thorough research on a company before buying shares in it. This involves using both fundamental and technical analysis. With fundamental analysis, you’ll evaluate a company’s value by assessing its financial factors, such as its balance sheet and management forecasts as well as macroeconomic indicators like inflation and labour market statistics. When you use technical analysis, you’ll study historical chart patterns and formations to predict the future price direction of a particular stock.

3. Market opening hours

The period in which you buy US stocks is also important because it determines the price and charges you’ll have to pay. You can get exposure to over 80 US stocks before the market opens, during the main session and after hours.

You’ll need to take steps to manage your risk, as taking a position pre-market or post-market and during weekend trading can carry additional risk because of lower liquidity, wider spread and higher levels of volatility.

4. Foreign exchange risk

It’s useful for UK residents to consider foreign exchange risk when investing in US stocks. When you get exposure to international markets, your potential returns will be affected by movements in the exchange rate.

For example, if the pound depreciates against the US dollar, its purchasing power will decrease – which means you’ll get fewer US shares. However, when the pound appreciates, it can buy more as its purchasing power is higher. It can also be helpful to keep an eye on factors that affect the value of the US dollar to determine when the best times to get exposure could likely be.

Learn how to hedge currency risk with us

5. Accounts and tax wrappers

Before you invest in US stocks, it’s important to choose an investment account that aligns with your financial goals. With us, you’ll choose between a general investment account, IG Smart Portfolio, ISA, and SIPP. With us, you can hold a Smart Portfolio within a general investment account, ISA, or SIPP.

ISAs and SIPPs enable you to shield your profits and income from capital gains tax. With an ISA, you’ll avoid having to pay tax on dividends and profits for up to £20,000 placed in your account per tax year.⁴ You can even use your allowance across both our share dealing ISA and Smart Portfolio ISA.

When you use a SIPP account, you’ll receive up to 45% tax relief on contributions, up to £40,000 per tax year. Additionally, you don’t pay tax on your savings while they’re invested. Your SIPP investment can be handled by our expert wealth managers via the IG Smart Portfolio SIPP, or you could build your own portfolio via our share dealing SIPP.

6. W-8BEN form

You cannot invest in US stocks without completing a W-8BEN form. As a UK resident, you’re required to fill in the W-8BEN form because you’re not a US taxpayer. Upon completing the form, you’ll be eligible to receive reduced withholding tax rates on dividends earned from the US shares you buy.

Find out more about filling in a W-8BEN form on our platform

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