NISA Tax on US Shares?

[Chris]

Hi All,

Looking to sell one of my US Shares within my NISA. Realized gains will be around 80.72%...nice little earner

However, I would like to sell in USD or "Foreign currency" mostly because the JPY yen payment seems to be less than the JPY to USD exchange rate (Approx $90.40/9,570 JPY less!) but also I intend to purchase more US stocks so might as well get the money in USD anyway.

I noticed this on the Rakuten FaQs: https://faq.rakuten-sec.co.jp/faq_detai ... d=10000051

I am a little confused and with my lack of Japanese and dependents on Google translate, I am not sure if this means the mentioned "20.315% tax" would apply to it should I sell in USD? And also why is the value approx $90.40/9,570 JPY less should I sell in JPY?

Surly the NISA should be tax free regardless of currency of the realized gains? So does this link only apply to shares purchased outside the scope of the NISA platform?

Thanks for any help/advice

Chris

[adamu]

1. Dividends on US stocks in a NISA are taxed at 10% by the US. But you're selling, so that's not related here.
2. The capital gains tax in the FAQ you provided doesn't apply to a NISA so you should be fine. There will be a transaction fee though - looks like it's $22.
3. When they estimate the value you get, they add a buffer to account for fluctuations in the stock price and exchange rate. The actual amount will be closer to market rates.
4. There is a fee of around 0.25 yen for every dollar you convert on Rakuten, so it's best to avoid converting as much as possible.

Also, it's important to realise that if you sell a NISA stock, you don't get the allowance back. So you wont be able to take advantage of tax free (or tax cheaper, for US stocks) dividends for that stock anymore, and you will only be able to purchase new stocks up to your remaining NISA allowance for the year.

[Chris]

Many thanks for the reply.

Regarding the dividends part - I recall you answered that in my question a week or so ago about the potential IBM dividends (should I decide to invest in them next year within my next year's NISA allowance) would be the 10% as per US dividends tax rate.

However, I also have shares in a Japanese company (on my NISA) which recently paid me dividends. So, I guess I have one more question....are dividends paid on Japanese shares within a NISA subject to taxation or are they tax free?

[adamu]

are dividends paid on Japanese shares within a NISA subject to taxation or are they tax free?

Tax free

[Chris]

are dividends paid on Japanese shares within a NISA subject to taxation or are they tax free?

Tax free

Haha that's what I like to hear! It's only 2,400 JPY from this company at the moment. But 2,400 JPY tax free is better than 2,400 JPY taxable!