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Microsoft Corporation is a technology firm that earns revenue through various channels, including software development, hardware sales, and online advertising. Its offerings encompass operating systems for personal computers, servers, and mobile devices, server applications for distributed computing, business applications, desktop and server management tools, software development tools, and online advertising solutions. Additionally, Microsoft designs and sells hardware such as the Xbox 360 gaming console.
The company also provides cloud-based solutions, delivering software, services, and content over the internet from centralized data centers. Cloud revenue primarily comes from usage fees and advertising.
How to Buy Microsoft Shares:
To purchase shares of Microsoft, follow these steps:
1. Brokerage Account: Most brokerage accounts facilitate the purchase of US shares. Buying in US dollars may incur a foreign exchange fee, typically around 1%, unless funded from a US dollar account.
2. Currency Exchange Risk: Investments in currencies other than sterling are subject to currency exchange risk. Fluctuations in exchange rates can affect the value of your investment in sterling terms, potentially resulting in a loss even if the stock price rises in its local currency.
3. Transaction Fees: Brokerages often charge higher fees for US shares compared to UK shares. It is advisable to compare fees from different brokers if trading US shares regularly.
4. Tax Forms: You will need to complete a W-8BEN form, which is valid for three years, to benefit from a reduced withholding tax on US dividends and interest, lowering it from 30% to 15%.
5. Tax Implications: Profits from US shares are subject to capital gains tax unless held within an Individual Savings Account (ISA) or Self-Invested Personal Pension (SIPP).
6. Regulatory Considerations: Stocks listed on overseas exchanges might involve additional dealing charges, exchange rate fees, and potential tax implications. They may also lack the same regulatory protections as those available in the UK.
