If I have have over 100kCHF in cash in IBKR it will get charged negative interest, does that mean if i convert anything above that to say USD this will solve that issue. Say my cash balance is 50kCHF, 50kUSD, 50kGBP then no negative interest right? (and also no commission if over 100kUSD)
Thatâs correct, but then not sure why youâd want to do that
Thatâs a lot of currency risk, why not just invest it? If you just want to hold CHF cash, it will be safer in a swiss bank (tho with how things are going, might have to spread it in a few banks to both get the insurance, and avoid the negative interests, seems like banks are lowering the amount where they charge lower and lower).
Reminder: if youâre only making US-domiciled purchases on IBKR, then it makes far more sense to have your base currency set to USD and then simply convert the entirety of your CHF deposits to USD each time. This way you only have one currency with which your purchases and monthly fees are deducted from.
I feel that a lot of people are complicating things by setting their base currency to CHF (perhaps because this is what a lot of Swiss-based bloggers like thepoorswiss are writing in their tutorials).
@Bojack, Iâm pretty sure this was originally advice you had written back in like 2017, so thank you for that!
I think fees are always in USD.
Base currency in CHF makes tax declaration simpler.
This is the reason why I have switched.
In which way?
The (ICTax) software does all the conversions as needed while filling in the forms; unless you think as in providing the pdf reports as attachments to the tax office?
I donât whant to add every transaction. I just report the year end positions and the dividends.
If you hold stock with US dividends, my understanding is that IB will report it in USD, and then convert it to CHF at the rate at the end date of the report.
While the tax office will want the CHF value of each dividend at the time it was issued. (only matters when thereâs some big FX change though, but in recent years weâve seen 10% shifts).
IB converts the dividend with the exchange rate that was when the dividend was paid.
You mean automatically convert? Wrong.
https://ibkr.info/node/2059
(as @pandas already said elsewhere: Interactive Brokers for dummies - #192 by pandas )
IB does not act to automatically convert balances back to the Base Currency as this action would require assumptions as to the account holderâs desired currency exposure as well as the trade price at which they would be willing to close the position.
Ah good to know, I never checked the details
They donât convert the holdings, but in the report they convert the value to the base currency.
Yeah but IB probably does not use the exact same âofficialâ exchange rate for the day as you can find on ictax. Can anybody check? The difference should not be huge anyways.
Unlikely that they do.
Unlikely that itâd matter though.
My dividend payments are probably too small anyway, to make a difference.
Yes I donât think the tax office would come after you because you are 75 cents off the official number
Hey guys,
I signed up to IB last night and was waiting for approval from a bank document which they subsequently approved, however now it says at the top:
"We periodically perform additional reviews on some accounts. That review process is currently underway for your account.
You will be unable to trade until this process is complete."
However underneath it says: " Your application is approved!
Youâre all set to fund your account and start investing"
Has anyone else seen this?
Thanks in advance
The difference will be quite small, even with 1M in assets and 20k dividends, a 0.5% difference would be around 15 chf difference in tax liabilities.
No worries! It was just a preliminary hold-up!
Out of curiosity Iâve done the calculation for my USD-denominated ETFs.
The difference between the total dividends in the IB report (in CHF) and the ICtax numbers is a whopping 0.08%
This is just one order of magnitude above the rounding numberâŠso yes as @xorfish said itâs really negligible
Well that will certainly simplify my next tax report.