Buying US Stocks From the UK: ISA, SIPP, Tax, FX

Most British guides to buying US shares spend their energy on the W-8BEN form, and for a long time so did we. It is the wrong place to look. Take £20,000 put into US shares tracking the S&P 500 on 2 January 2025 and sold on 24 September 2026, held in a stocks and shares ISA. The US withholding tax that the form exists to reduce cost £56. The pound's rise against the dollar over the same stretch cost £1,675. The form matters; it is just not where the money went.

What follows ranks every leak on a US holding for a UK resident, with the arithmetic shown. First, though, something no platform guide covers: what US companies say about Britain to their own shareholders. It changes what "diversifying into America" buys you.

What US companies told their shareholders about Britain

Inve has parsed 6,113 US earnings calls held between 1 January 2025 and 10 September 2026, from 3,158 companies. "UK", "U.K.", "United Kingdom" or "Britain" appears in the summaries of 674 of those calls, from 425 companies — a total that includes a few British companies with US listings, such as Barclays and BP. Every example below is a US company. The count says little; the content says a lot.

Start with who is silent. The UK does not surface in any of Tesla's, Meta's, Broadcom's, AMD's, Coca-Cola's or PepsiCo's 2025–26 call summaries in the record. McDonald's and Yum! Brands mentioned it on every one. Read what the talkers actually say and Britain turns up in one of four roles.

Britain as a customer, and often the customer is the state. Palantir's international government revenue reached $127 million on its August 2025 call, up 37% year on year and, in the company's words on the call, "bolstered primarily by our continued work in the U.K." The same words came back in November 2025, when the line was $147 million and up 66%. The February 2025 call had put a name to the work: the NHS Federated Data Platform, with 87 acute NHS trusts signed up as of November 2024. Moderna is the other clear case. On 13 February 2026, Stephen Hoge told investors: "We expect a $200 million U.K. COVID order to be fulfilled in the first half of 2026 for their spring booster campaign." By May, first-quarter revenue of $400 million had beaten guidance, driven primarily, per the call, by the long-term partnership with the UK government. A British investor buying these shares partly owns a supplier to the Treasury they already pay.

Britain as a cost line set by British policy. On Penske Automotive's July 2026 call, Randall Seymore explained the zero-emission vehicle mandate to an analyst: "The mandate is 33% on the ZEV and we're only at 25%, next year it goes to 38%." Align Technology booked an estimated $37.5 million UK VAT liability in the June 2026 quarter after the Upper Tribunal ruled for HMRC that its clear aligners do not qualify for the VAT exemption, with 20% VAT on invoices from 7 September 2026. Management's description of the mechanism was blunt: "we pass that through back to HMRC." Each is a Westminster decision showing up in a US income statement.

Britain as a consumer under pressure. In February 2025 an analyst asked McDonald's what was going wrong in the UK, historically one of its strong markets. Chris Kempczinski answered: "I think what we've seen in the U.K. is certainly the consumer there is under pressure. There's cost of living issue that exists in the U.K. That is putting pressure on the low-income consumers." At Unum, the pressure ran the other way — claims, not spending. Steven Zabel said in July 2026: "What we're seeing in the U.K. right now is a higher greater portion of claims coming from high-income employees." Unum's UK benefit ratio had risen to 82.2% from 75% a year earlier.

Britain as a market worth leaving, or doubling. Grainger recognised a $196 million loss on its October 2025 call for the pending sale of its UK business Cromwell and the proposed closure of Zoro UK, and management expected leaving to add about 20 basis points a year to the whole company's operating margin; both exits were completed in the fourth quarter of 2025. EMCOR completed the sale of its UK business on 1 December 2025. Sun Communities has agreed to sell its UK business, with completion expected by the end of 2026. Against that, Yum!'s Chris Turner said in July 2026 that "the U.K. will actually be our lead market on many of these initiatives" for KFC, and Comcast has guidance on record to open a Universal resort in Bedford in 2031.

Why should this matter in Leeds or Leicester? The usual reason to buy US shares is to stop your fortunes riding on one economy. Some US companies are, in parts that move the numbers, bets on the NHS budget, the ZEV mandate, HMRC's view of dental devices and the British grocery bill. That is no reason to avoid them; it is a reason to know which ones before counting them as diversification. A US company's own call is the cheapest place to find out; reading an earnings call transcript well takes about half an hour.

The leaks, in order of size

The exchange rate. The Bank of England's daily spot series (XUDLUSS) had the pound at $1.2375 on 2 January 2025 and $1.3220 on 24 September 2026, after a low of $1.2152 on 13 January 2025 and a high of $1.3790 on 28 January 2026. Every dollar bought at the start came back as 6.4% fewer pounds. In another window the dollar rises and the effect is a gift. Either way it is the biggest number on the page.

The platform's FX charge. You pay it twice: pounds to dollars on the way in, dollars to pounds on the way out, plus on every dividend converted. Published charges as at 25 September 2026: Trading 212 lists a 0.15% FX fee on its Invest, ISA and SIPP accounts. AJ Bell's ISA tariff charges 0.75% on the first £10,000 of an international trade, 0.50% on the next £10,000 and 0.25% above £20,000, and 0.50% when it converts a dividend to sterling. Hargreaves Lansdown charges 0.99% on the first £10,000, 0.50% from £10,000 to £25,000 and 0.20% above, and converts foreign dividends to sterling automatically. That spread — 0.15% to 0.99% on a small trade — is the largest cost you actually control.

US withholding on dividends. 30% by default; 15% for UK individuals and zero for UK pension schemes under the US–UK income tax treaty. What happens next depends on the wrapper.

UK tax on gains and dividends, outside an ISA or pension. For 2026-27, the capital gains annual exempt amount is £3,000 and the rates are 18% and 24%. Dividends above the £500 allowance are taxed at 10.75%, 35.75% or 39.35%. The first two are two points higher than in 2025-26, a Budget 2025 change.

US tax on the gain itself is normally nil. For a UK resident who is not a US citizen, Article 13(5) of the treaty leaves gains on ordinary shares taxable only where the seller is resident; US citizens and gains tied to US real property follow different rules.

W-8BEN, and which wrapper keeps the 15%

The W-8BEN is the form that tells a US payer you are a UK resident entitled to the treaty rate. Without one on file, dividends are withheld at 30%. It stays valid until the last day of the third calendar year after the year you sign it, unless your circumstances change, so a form signed in September 2026 normally runs to 31 December 2029. Hargreaves Lansdown, for one, asks for it before your first US purchase in any account.

In an ISA, the 15% is gone for good. UK relief for foreign tax works as a credit against UK tax on the same income, and HMRC's HS263 helpsheet is explicit that the credit "can never be more than the UK tax liability". An ISA dividend carries no UK tax, so there is nothing to set the credit against. On a £100,000 ISA of US shares yielding 1.5%, that is £225 a year the US keeps and no British claim will return.

In a SIPP, the treaty rate is zero. Article 10(3)(b) of the treaty exempts dividends whose beneficial owner is a UK pension scheme. The scheme claims that rate itself, on its own entity paperwork; it is not something your personal W-8BEN secures. AJ Bell and Hargreaves Lansdown both publish 0% for US dividends in their SIPPs, but their onboarding differs: AJ Bell says no W-8BEN is needed in its SIPP, while HL requires one to hold US shares in any HL account, including the SIPP. Follow your own platform's requirements. The catch is administrative: a November 2025 paper for the UK Shareholders' Association argued that SIPP providers fail to reclaim foreign tax withheld above treaty rates, and that the member has no standing to claim personally. For US shares the 0% is usually applied upfront, but check your statements.

In a general investment account, the 15% becomes a credit. You declare the gross dividend, work out UK dividend tax, and deduct the US tax already paid, up to the UK tax due. For a higher-rate taxpayer in 2026-27, 35.75% UK tax less the 15% credit leaves 20.75% more to pay. For a basic-rate taxpayer, 10.75% is below 15%, so no more UK tax is due and the unused 4.25 points are simply lost.

These are mechanics, not advice on your position; for that, check with a qualified tax adviser in the UK.

The worked example: £20,000, January 2025 to September 2026

The opening number, rebuilt line by line. Assumptions:

• £20,000 invested on 2 January 2025 and sold on 24 September 2026, by a higher-rate taxpayer.
• The shares move exactly with the S&P 500 price index: 5,868.55 to 7,704.13 (FRED series SP500), a gain of 31.28% in dollars.
• Dividends total 2% of the starting dollar value and, to keep the arithmetic simple, are treated as paid on the sale date and converted then. In reality they arrive quarterly, HL and AJ Bell convert them to sterling as they arrive, and HMRC's SA106 notes require each to be converted at the rate when it arose. The table is a simplified model, not a tax history.
• FX at the Bank of England spot rate plus a flat 0.75% each way (a simplification, not any platform's tiered schedule); no dealing commission or platform fee.
• In the general account, the £500 dividend allowance is already used by other dividends, the dividend falls in 2026-27, and the FX charges are treated as costs of buying and selling.

Two lines deserve their working. The capital gain is computed in sterling, converting the cost at the purchase-date rate and the proceeds at the sale-date rate, which is how HMRC's Capital Gains Manual (CG78310) requires it, rather than converting the dollar gain at the sale rate. The shares fetched $32,247.68, or £24,393.10 at $1.3220; less the £182.95 FX charge on that part of the sale and the £20,000 cost, the gain is £4,210.16. Less the £3,000 exempt amount, £1,210.16 is taxed at 24%: £290.44. The dividend is £371.62 in pounds; UK tax at 35.75% is £132.86, less the £55.74 already taken by the US, leaves £77.11.

Now the comparisons that matter. Had the pound stayed at $1.2375, the ISA would have ended at £26,198.21 — £1,674.54 more than it did. That single line is thirty times the £55.74 of US withholding. Swap the FX assumption: at 0.15% each way the ISA ends at £24,821.07; at a flat 0.99% each way, £24,405.21. The £416 gap is more than seven times the withholding. And note the quiet help in the general account: because the gain is measured in pounds, the shares that rose 31.3% in dollars showed a taxable gain of 21.1% in sterling after charges. Outside a wrapper, part of the currency loss comes back as lower tax; inside an ISA, none of it does.

The SIPP "wins" by £55, with money you cannot touch until pension age and withdrawals taxed as income. ISA-versus-SIPP is a retirement question with a withholding footnote.

The currency is a position, not a fee

Owning US shares from Britain is like letting a flat abroad and being paid rent in the local currency. The rent and the flat are the company's business. The exchange rate is a second investment you did not choose but own anyway, and over this period it swung between $1.2152 and $1.3790, a 13% range. Nobody can reliably say which way the pound goes next, and this guide will not try. Three plain consequences: a sterling-hedged fund removes the swing, both ways, for a fee; on a platform that offers a dollar balance, keeping dividends in dollars avoids an FX charge every quarter; and a US holding should be judged as a business in dollars and as an investment in pounds, without confusing the two.

US estate tax: the $60,000 line and the 1979 treaty

Under US law, a person who is neither a US citizen nor US-domiciled is taxed on US-situated assets at death, and shares in US companies are US-situated. The IRS's Form 706-NA instructions set the filing threshold at $60,000 of such assets, and the unified credit for non-residents at $13,000. Without a treaty, the unified rate schedule in the Form 706 instructions climbs to 40% on the slice above $1 million.

UK residents have a treaty. Under Article 5 of the 1979 US–UK estate and gift tax treaty (see also HMRC IHTM27177), a person domiciled in the UK and not a US national is generally taxable by the US only on US real property and on business property of a US permanent establishment — not on US shares. Two cautions. Relying on the treaty is a position the estate states to the IRS (the Form 706-NA instructions ask for a treaty-based statement), and a MoneySavingExpert forum thread from March 2025 describes an executor eight months into moving a deceased UK citizen's shares out of a US broker. And since 6 April 2025 UK inheritance tax follows long-term residence rather than domicile. Yet HMRC's own manual (IHTM47001) notes that domicile "may remain relevant" where a treaty uses the common-law concept. A 1979 treaty written around domicile, in a UK system that no longer uses it for IHT, is exactly the kind of edge worth a specialist's hour if your US holdings are large.

How Inve helps a UK investor research a US company

Everything in the first section came from Inve's parsed US calls, and the call briefs and company pages are public, no account needed. Each company page on the A–Z of US stocks carries its earnings-call summaries: guidance with the speaker and the verbatim quote, the analysts' questions with a grade for whether management actually answered, the risks management named, and, on most calls, a watchlist of what to check next quarter. Search a page for "U.K." and you have in minutes what took a database query here. Inve does this across 3,158 US companies with parsed calls, which is the point: nobody reads fifteen transcripts a quarter by hand.

Guidance is where exposure turns into commitments. Moderna's UK deliveries and Comcast's 2031 Bedford opening both sit on the US Guidance Tracker with the quarter they were made and what has happened since. The discipline of keeping that ledger is laid out in tracking guidance across quarters. And because US results land in the British afternoon and evening, the US earnings calendar is the simplest way to know which of your holdings reports this week.

Where this can mislead you

The worked example uses one window, and a kind one for sterling: in a year when the dollar rises, the currency line flips sign and dwarfs everything else the other way. The 2% dividend figure is an assumption, not a measured S&P 500 yield. FX charges change; Hargreaves Lansdown's changed in March 2026. Dealing commissions and platform fees are left out, and on a small account they can outweigh everything but the currency.

On the calls: the counts cover calls held from January 2025 to the September 2026 data, so they show how management talks about Britain now, not a permanent truth. A company that never mentions the UK may still earn money there, and the four roles are Inve's reading of the record, not the companies' own classification.

The owner's question

Before buying a US company from Britain, the useful question is not "how do I avoid the 15%?" It is "what am I actually buying — a US business, a currency position, and, for some of them, a second helping of the British economy I already own through my job, my house and my pension?" The W-8BEN takes ten minutes. The other question takes a few earnings calls, and it is the one that decides whether the diversification is real.

Frequently asked questions