Withholding Tax in ISA

richi1

Hi All,
I have some foreign stocks in my Stock & shares ISA.
Two have recently paid a dividend (Syngenta ord CHF 0.10 and Greencore) and withholding tax has been deducted at a rate of 35% and 20%.
Where can I find out about Withholding Tax and why is the %age different?
Is there any benefit in holding them in a ISA?

Thanks in advance.

adambro

An ISA can only shield you from UK taxes. I assume the two different rates are tax are due to the two different countries in which those two companies are based having different rates of tax.

35% is the dividend tax for Switzerland so I assume that is for your Syngenta shares. 20% is the dividend tax for Ireland and so I assume that is for Greencore.

The benefit is that you're not then having to pay tax to HMRC on your dividends.

dunstonh

Strangely, personal pensions can still claim back withholding tax but not ISAs and SIPPs.

richi1

Thanks Adambro and Dunstonh,

More questions.

Can I elect to pay UK tax rate instead of the tax rate of the country the shares are based eg opt out of paying 35% Tax on Syngenta to the Swiss authorities and pay the UK tax rate - which in an ISA might be 10% for basic rate tax payer ???
or am I stuck with this position is if I wish to retain a holding in Syngenta?

if so

Is there an alternative way to invest in Syngenta (or other non UK shares) other than holding the actual shares. eg CFD's ??? and still gain from either an increase in the share price or a dividend payment.

BruceyBonus

You can download a copy of Form 86 off the Eidgenössische Steuerverwaltung (Swiss Federal Tax Administration) website. It can be confusing to fill in, but if you keep it after this year then it can be used to help you fill in next year's.

You need to download a program called SnapForm Viewer to fill in the form. Only two pages appear on screen. The form will print four times, each copy is slightly different. Pages 7&8 (i.e. copy 4) are kept by you. Send the other 6 pages to your UK tax office (the one showing on your payslips) along with proof of the dividend payment. They will send the first four pages back to you (i.e. they keep the third copy). One of them will be stamped and signed. You then send everything that the tax office sent back to you to the following address: Swiss Federal Tax Administration (Eidgenössische Steuerverwaltung), Eigerstrasse 65, 3003 Bern, SWITZERLAND. It will then take several months, but a payment in CHF will hit your bank account. The second copy of the form is then returned back to you for your records.

My dad receives dividends from a Swiss company that are taxed at 35%. He can claim back 20% using Form 86. I don't really understood how double taxation agreements work, but the other 15% counts as his UK taxation (or so HMRC told him).

richi1

Hi Brucey,

Thanks for your detailed reply.
Very much appreciated.