Strateo.ch Brokerage Account

[BlueMist]

How do they compare to Interactive Brokers? And I’ve heard you can also explicitly sign up with IB’s HK branch?

IB doesn’t have banking license. Also it is super confusing when it comes to estate tax upon death. In theory non US person holding Irish domiciled investments should have any issues with US estate law, provided no cash above $60k was sitting on IB account.

Also I think IB “jurisdictions” only matters for cash balances. I once read IB UK T&C and it clearly states that securities are held with IB US.

 

[JustAnotherNomad]

Does it matter if they have a banking license when you only hold stocks?

And as for estate tax, does the broker really matter when you hold individual US stocks?
US estate tax generally shouldn’t matter when you hold less than $60k in US assets. With Irish domiciled ETFs, you can hold more than $60k without needing to worry about estate tax - but that applies only to ETFs, not individual stocks. At least that’s what I’ve read.
And I guess you can buy both individual stocks and Ireland-domiciled ETFs both through IB and other brokers - so does it really make a difference?

 

[BlueMist]

I don’t know. But I would rather not take my chances with IB, if there are more reliable non US alternatives. IB trading platform is horrible. Markets have strange names e.g. German Xetra is called IBIS2... The only good thing is that IB is cheap for trading and holding.

 

[kkein]

IB doesn’t have banking license. Also it is super confusing when it comes to estate tax upon death. In theory non US person holding Irish domiciled investments should have any issues with US estate law, provided no cash above $60k was sitting on IB account.

Also I think IB “jurisdictions” only matters for cash balances. I once read IB UK T&C and it clearly states that securities are held with IB US.

Can you explain a bit more?
What happens if non-US person parks 100k€ on IB account? Are the money going to get taxed by US or someone else?

 

[BlueMist]

Can you explain a bit more?
What happens if non-US person parks 100k€ on IB account? Are the money going to get taxed by US or someone else?

IB US cash account = estate tax upon death above $60k.

 

[kkein]

IB US cash account = estate tax upon death above $60k.

Meaning no problems if money are parked there and then extracted before death? Also, how does IB know that you die and it's your wife wiring the money back into your or hers account?

 

[BlueMist]

Meaning no problems if money are parked there and then extracted before death? Also, how does IB know that you die and it's your wife wiring the money back into your or hers account?

Sure. You can also have joint account at IB.

 

[Martin Everson]

How do they compare to Interactive Brokers?

IB will always be king of trading tools.

And I’ve heard you can also explicitly sign up with IB’s HK branch?

Like HK is a great place right now to open an account...lol.

Capital flight from Hong Kong “set to spike” | Family Offices | AsianInvestor

Wealthy individuals are increasingly shifting assets out of the city and considering moving themselves elsewhere too, amid rising sanctions and lost confidence, say financial advisers.

www.asianinvestor.net

 

[rowena]

Here are the scenarios for estate tax:

- If you have more than $60k cash or you have US equities in US broker then all of them subject to the US estate tax.
- If you have US equities in any broker(including EU brokers) all of them again subject to the US estate tax.
- If you have NON-US equities(Irish, Luxembourg domiciled etc...) all of them not subject to the US estate tax regardless of the country of the broker(US, EU or Asia etc...).

P.S.: If you want to keep cash at the broker then go and buy low-risk bond ETFs(ex: IGLO). You will not subject to US estate tax and you will get interest revenue.

 

[JustAnotherNomad]

- If you have NON-US equities(Irish, Luxembourg domiciled etc...) all of them not subject to the US estate tax regardless of the country of the broker(US, EU or Asia etc...).

Sure? Even if you use a US broker?
Also I believe US brokers aren’t allowed to offer EU-domiciled ETFs on US stocks...

 

[rowena]

Sure? Even if you use a US broker?
Also I believe US brokers aren’t allowed to offer EU-domiciled ETFs on US stocks...

Yes, even if you use US broker.

US estate tax is about the domicile of assets not about the country of broker. If you buy US assets via EU broker, you will be subject to US estate tax.

Lots of US brokers offers EU or other market ETFs. You can use Interactive Brokers US.

 

[JustAnotherNomad]

Seems like there is an offshore tax levied by the US, which is why US persons should avoid Ireland-domiciled ETFs.

 

[Martin Everson]

Avoid US situs assets and the US dollar period. I explained US inheritance tax 2 years ago on this forum. If your not a US person do not buy or invest in any US financial assets. It makes no sense to give the US domain over any of your wealth especially when they are sitting on so much debt, tech stocks are in a bubble, current president has lost the plot and US deficit set to hit $3.3trn in this financial year alone.

Good read below:

Avoid US-domiciled ETFs unless you want to end up like Al Capone | Swissquote

en.swissquote.lu

 

[JustAnotherNomad]

I’m pretty sure you can avoid US estate tax using a trust, it just requires a more complex setup.

 

[Martin Everson]

Just avoid US situs assets and thank me later. Look to the future and invest in Asia and emerging markets via your broker.