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How to invest in Apple: complete guide to buying AAPL shares

Karen Haslam | June 3, 2013
Everything you need to know about buying AAPL shares, and whether you should.

You can also make your share transactions through a investment ISA. That way you can save £11,520 a year, tax free.

Buying AAPL shares in the UK
If you are based in the UK there are some extra steps necessary before you can buy Apple stock. If you have never traded in US shares before, you will need to fill in the W-8BEN form. This confirms your foreign status for tax purposes.

If you are thinking of buying Apple shares get this form filled in now so that you can buy shares on the day you choose, not days later because you weren't prepared.

What does it cost to buy shares?
When you buy shares, you pay 0.5% stamp duty on top of the cost of dealing.

Any dividend income is also subject to tax. The dividend ordinary rate of 20% applies for basic rate taxpayers who earn up to £32,010, a rate of 40% if you earn up to £150,000 and 50% if you earn more than that, in the tax year 2013/14. When you receive dividend payments a percentage of tax has already been paid, and it will appear on your dividend voucher as a tax credit and may mean that as a basic rate taxpayer you have no further tax to pay. If on the other hand you are a higher rate taxpayer you will have an outstanding tax liability to pay when you make your tax return. There's lots of information about this here.

There's also capital gains tax to consider. If you sell your Apple share for more money than you bought it for, you're will have made a capital gain and it will be liable to tax at a rate of 18%, or 28% for higher rate tax payers. Before any tax is payable though, you have an annual tax-free allowance for Capital Gains Tax, which is £10,900 for the 2013/14 tax year. Read more here.

An exception to these tax rules is dividends from ISAs, which are tax-free.

For bigger investors there's also a mandatory £1 to the takeover panel (PTM) for all trades worth more than £10,000.

Another way to save money is to dealing with electronic share certificates. They are a lot less costly than dealing in paper share certificates.

We're not investment advisors so we don't recommend any particular brokers. There is this article about investing on the MoneySavingExpert site, but note it's a bit out of date. Or look here at this comparison of UK share dealing accounts.

Why is Apple's share price so volatile?
In many instances there is absolutely no connection between the actual economic value of a business and its stock price, and in the case of Apple this is certainly true. Apple is actually criticized for having too much money in the bank. In some ways it's success has made it the target of much criticism.

 

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