W-8 ben-e

stphnstevey

When do you need this?

If I invest in a S&P 500 tracker listed in GBP on the LSE (eg. CSP1)?

If I invest in Facebook shares via IWeb Trading Account (unwrapped)?

What about either if wrapped in a ISA or SIPP?

If you haven't filed one previously and have had USA tax withheld, can you claim this back in anyway or is this lost?

Do you need to put anything on your Self Assessment Return?

masonic

Not in the first case (iShares will do it on your behalf and all declarable income is treated as being from Ireland, where the ETF is domiciled), but in the facebook case yes.

stphnstevey

masonic wrote: »

Not in the first case (iShares will do it on your behalf and all declarable income is treated as being from Ireland, where the ETF is domiciled), but in the facebook case yes.

Thanks for that

I believe Facebook dont pay dividends, is it just tax paid on dividends or growth (in some way) as well?

MDMD

If a W8 is required you need to make sure you have the correct type. The W-8BEN-E is for entities (companies, partnerships etc).

Non-US-resident Individuals need the W-8BEN (without the -E)

https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

eskbanker

stphnstevey wrote: »

W-8 ben-e

Is it just me who has 'Stand By Me' on the brain now?

masonic

stphnstevey wrote: »

Thanks for that

I believe Facebook dont pay dividends, is it just tax paid on dividends or growth (in some way) as well?

The W-8BEN is to claw back some of the withholding taxes levied in the US. It is not possible for them to withhold tax on capital gains. It is likely your broker will want you to complete a W8-BEN when you start trading US shares, whether or not it actually saves you any WHT.

londoninvestor

stphnstevey wrote: »

What about either if wrapped in a ISA or SIPP?

A useful thread about the situation with ISAs and SIPPs:
https://forums.moneysavingexpert.com/discussion/5463197/foreign-dividends-w8-ben-etc-sipp-vs-isa

Brief summary - for an ISA you need to complete the form; for a SIPP you don't (but check whether your provider does the necessary to get US dividends tax-free - if they don't, you might consider opening a SIPP with a different provider for your US holdings)

stphnstevey wrote: »

If you haven't filed one previously and have had USA tax withheld, can you claim this back in anyway or is this lost?

You can file a non-resident US tax return (form 1040NR), though not sure how far in retrospect you can reclaim the tax. People on the Cutting Tax board may know more about this.

stphnstevey wrote: »

Do you need to put anything on your Self Assessment Return?

If in an ISA or SIPP then no. If in an unwrapped account then yes - the dividends are subject to UK tax, though depending on your UK tax position, Foreign Tax Credit may leave you in a position where there is no additional tax to pay.

As masonic says, all the above only apply to direct holdings of US stocks - not to funds that are domiciled elsewhere but happen to hold US stocks.

londoninvestor

masonic wrote: »

The W8-BEN is to claw back some of the withholding taxes levied in the US. It is not possible for them to withhold tax on capital gains.

Yes - no US tax for non-resident non-US-citizens on a capital gain in a US stock.

stphnstevey

Thank you all for your help, I think I have a much better understanding now

So it seems a pension is the best place to hold US shares paying dividends?
It is mentioned elsewhere that some pension providers claim back the US tax but others dont, anyone know which do?

If you pay the 15% tax on US share dividends through and Trading account, can you claim this back and how do you do it?
It seems that it is not claimable through an ISA?

londoninvestor

stphnstevey wrote: »

Thank you all for your help, I think I have a much better understanding now

So it seems a pension is the best place to hold US shares paying dividends?
It is mentioned elsewhere that some pension providers claim back the US tax but others dont, anyone know which do?

I believe AJBell and HL do claim it back - not sure about others.

If you pay the 15% tax on US share dividends through and Trading account, can you claim this back and how do you do it?
It seems that it is not claimable through an ISA?

It's not claimable back in either account.

However - let's say you're in a position where you would pay 7.5% UK tax on your unwrapped dividends. In this case, Foreign Tax Credit Relief means you will effectively have no UK tax to pay on dividends on unwrapped US stocks - just the 15% US tax. Then you're no worse off than if you had those same stocks in your ISA.

So in that case it's better to move the US stocks out of the ISA and make space for UK shares/funds, where the ISA will save you tax.

Obviously there are a lot of permutations for individual circumstances, but quite often you're going to find that if you can't fit your whole portfolio in your ISA, it makes sense to keep your US stocks outside it.

(Edit - this all refers to income tax; ISAs still do of course have a CGT benefit.)

bostonerimus

londoninvestor wrote: »

Yes - no US tax for non-residents on a capital gain in a US stock.

Not strictly true. If you are a US citizen, but non-US resident, you are still liable for capital gains in the US where ever the gains arise.