With the launch of US shares on Sharesies, you’ve got the opportunity to diversify your investment portfolio, learn about thousands of new companies and funds, and have your US and NZ shares all in one beautiful place! 🍍
So far, we’ve shared the three US exchanges that we’re providing access to (NYSE, Nasdaq, and CBOE), and how foreign exchange works on Sharesies. We had heaps of questions, feedback, and requests from you, so we thought we’d jump in and chat about some of these today!
What are the fees for US shares?
Subscription fee
For US shares, there are no changes to our existing subscription fee.
Exchange fee
To buy US shares in Sharesies, you need to exchange your NZ dollars into US dollars. When you exchange money, you’re charged a 0.4% exchange fee—we show this exchange fee upfront rather than hide it in the exchange rate. Check out our foreign exchange blog for more info.
Transaction fees
When you invest in US shares (both companies and exchange-traded funds), you’re charged a transaction fee based on the US dollar amount of your order—these are also known as ‘brokerage fees’:
0.5% for orders up to $3,000 USD, plus
0.1% for amounts above $3,000 USD
Who is Sharesies partnered with for US shares?
We have a custodial service to keep your money and investments safe. As part of this, your US shares are held under Sharesies Nominee Limited. You own all of the money and investments you have in Sharesies—we can’t do anything with your money or investments unless you instruct us to.
For US shares, we’re partnered with a broker called DriveWealth and its custodian Citibank. Both DriveWealth and Citibank are regulated by the Security Exchange Commission (SEC). DriveWealth execute trades for US shares, and Citibank hold the US shares in custody on behalf of Sharesies Nominee Limited (and you!).
Sharesies is a customer of DriveWealth, not each individual Sharesies investor. This means we don’t share any of your personal information with DriveWealth—they only see the combined information of all Sharesies investors together.
If anything were to happen to DriveWealth or Citibank, your US shares would still be safe and owned by you.
What tax do I have to pay on my US shares?
We make things easy by paying tax on income from US shares for you! When you receive dividends or distributions in Sharesies, the amount you receive has the tax already accounted for. At the end of the tax year (sometime in April), we’ll send you a tax statement showing how much tax you’ve paid.
When you invest, you need to pay tax to the country the investment is held in, as well as the countries you’re a tax resident in. We record the tax info that needs to go to the IRS (Internal Revenue Service) and IRD (Inland Revenue) and pay the tax on your behalf.
Some countries have tax treaties to avoid taxing you twice on the same investment. There are three tax treaty options depending on what country you’re a citizen or tax resident of.
NZ tax treaty benefit
If you live in New Zealand and you’re a New Zealand tax resident, you come under the New Zealand tax treaty. The total tax Sharesies pays on your behalf for your US shares income is 33%.
For example, if you’re entitled to a $1.00 dividend from a US company, you pay $0.33 in tax, and receive the remaining $0.67 (which is displayed in your USD Wallet).
If you’re a US person
If you’re a US citizen, Green Card holder, or tax resident of the US, you’re considered a US person. The total tax Sharesies pays on your behalf for your US shares income is 33%—that’s 33% tax to the IRD and no tax to the IRS.
For example, if you’re entitled to a $1.00 dividend from a US company, you pay $0.33 to the IRD, and receive the remaining $0.67 (which is displayed in your USD Wallet). As a US citizen or Green Card holder, you may have other tax obligations to the IRS. Sharesies won’t handle this for you and you should seek tax advice.
If you live outside of NZ
If you have an address outside of New Zealand, we aren’t able to claim a tax treaty rate on your behalf. The total tax Sharesies pays on your behalf for your US shares income is 48%.
For example, if you’re entitled to a $1.00 dividend from a US company, you pay $0.48 in tax, and receive the remaining $0.52 (which is displayed in your USD Wallet).
FIF tax
If you have over $50,000 NZD invested in overseas investments, you’re subject to the Foreign Investment Fund (FIF) tax rules. If you’re in this situation, Sharesies won’t handle your tax for you and you should seek tax advice.
If you have less than $50,000 NZD invested in overseas investments, you don’t need to worry about this!
Can I transfer my existing US shares into Sharesies?
You aren’t currently able to transfer your existing US shares into Sharesies. This is something we’re working on adding in the future!
When are US shares available on Sharesies?
US shares are available now! Sign up to Sharesies, or check out our help centre to learn how to start investing in US companies and exchange-traded funds.
Ok, now for the legal bit
Investing involves risk. You aren’t guaranteed to make money, and you might lose the money you start with. We don’t provide personalised advice or recommendations. Any information we provide is general only and current at the time written.