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Is it better to buy UK stocks on LSE rather than through ADRs?

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Old 01-07-2019, 10:29 PM   #1
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Is it better to buy UK stocks on LSE rather than through ADRs?

Forex risks aside , can anyone confirm if you are subjected to any capital gain or dividend withholding tax on LSE?

Looking to keep buying more LYG, PRU, BTI etc, and wondering if it is better to convert my USD to BGP and buy them on LSE.
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Old 01-07-2019, 11:14 PM   #2
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The ADRs can actually be rather attractive from a tax point of view for non-U.S. persons. They should be less expensive to buy and sell, and (unlike in the U.K.) there's no stamp duty when sold. According to IRS Private Letter Ruling 200243031 they're U.S. estate tax exempt for non-U.S. persons. The same cannot be said for U.K. listed company shares, which are subject to U.K. Inheritance Tax (IHT) above a threshold. According to various investment houses ADRs are not subject to U.S. dividend withholding tax either, and I think some posters to this forum have anecdotally confirmed that detail with their ADRs.

As always, consult a tax expert or at least do more research.

I don't generally recommend investing in individual shares or ADRs.

There is no forex risk between ADRs and their U.K. share counterparts. I'm not sure what you're referring to there.

Last edited by BBCWatcher; 01-07-2019 at 11:17 PM..
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