Swiss Withholding Tax

The_Realist

Hi All,

I own Swiss Re shares and have recently received a dividend (Late April 2021).  This is subject to 35% withholding tax which I can understand I can reclaim part of?
Does anyone have any experience of doing so, and could they provide me with a dummies guide on how to do so?  I'm getting rather confused with it all!
Thanks

Jeremy535897

Do you complete a self assessment tax return?

The_Realist

Jeremy535897 said:

Do you complete a self assessment tax return?

I do, yes.

[Deleted User]

The_Realist said:

Hi All,

I own Swiss Re shares and have recently received a dividend (Late April 2021).  This is subject to 35% withholding tax which I can understand I can reclaim part of?
Does anyone have any experience of doing so, and could they provide me with a dummies guide on how to do so?  I'm getting rather confused with it all!
Thanks

The foreign dividend tax can be credited against your U.K.  liability on THAT SOURCE of income in the U.K. it will not be refunded or set against any other liability. For example, if you had no U.K. liability on dividends no tax credit would be available.

The_Realist

[Deleted User] said:

The_Realist said:

Hi All,

I own Swiss Re shares and have recently received a dividend (Late April 2021).  This is subject to 35% withholding tax which I can understand I can reclaim part of?
Does anyone have any experience of doing so, and could they provide me with a dummies guide on how to do so?  I'm getting rather confused with it all!
Thanks

The foreign dividend tax can be credited against your U.K.  liability on THAT SOURCE of income in the U.K. it will not be refunded or set against any other liability. For example, if you had no U.K. liability on dividends no tax credit would be available.

thanks.  I have no UK dividends except for a small amount in a stocks and shares ISA

[Deleted User]

Sorry - hadn’t finished. It could well be that you may have an overpayment of withholding tax which could be claimed from Switzerland and I have heard about an instance of a successful attempt to reduce it. Unfortunately I have no idea how one goes about this.

But this may help:

https://the-international-investor.com/investment-faq/reclaiming-withholding-tax-foreign-dividends

Jeremy535897

The UK-Switzerland DTA provides that the Swiss tax payable by a UK resident on a Swiss dividend is limited to 15%, so therefore 20% has to be recovered from Switzerland (not straightforward as indicated above, see https://www.investorschronicle.co.uk/tax/2018/10/25/a-taxing-chore/ ). The remaining 20% is dealt with on the tax return as a credit against whatever tax you pay on those dividends, with any excess being recoverable.

The_Realist

Thanks.

I'd be interested in hearing how worthwhile this is from anyone who experienced it (it's going to be about £250 for me).

It sounds like I need to:

1. Fill in a Form 86.
2. Send to my tax office (who/how?)
3. Once verified, send the from to Switzerland?

Thanks

[Deleted User]

Jeremy535897 said:

The UK-Switzerland DTA provides that the Swiss tax payable by a UK resident on a Swiss dividend is limited to 15%, so therefore 20% has to be recovered from Switzerland (not straightforward as indicated above, see https://www.investorschronicle.co.uk/tax/2018/10/25/a-taxing-chore/ ). The remaining 20% is dealt with on the tax return as a credit against whatever tax you pay on those dividends, with any excess being recoverable.

irrecoverable?

Jeremy535897

purdyoaten2 said:

Jeremy535897 said:

The UK-Switzerland DTA provides that the Swiss tax payable by a UK resident on a Swiss dividend is limited to 15%, so therefore 20% has to be recovered from Switzerland (not straightforward as indicated above, see https://www.investorschronicle.co.uk/tax/2018/10/25/a-taxing-chore/ ). The remaining 20% is dealt with on the tax return as a credit against whatever tax you pay on those dividends, with any excess being recoverable.

irrecoverable?

No, but I meant "the remaining 15%" not "the remaining 20%". Of the 35% tax credit, 20% has to come from Switzerland, using form 86 as OP has said:
"UK resident shareholders
 Three copies of Swiss tax Form 86, duly completed and signed, must be sent to the to the tax office in the United Kingdom to whom your income tax return is made (or to the tax office for the district in which you reside, if you have not made such a return). The tax office has to certify the forms and the claimant shall subsequently send the first two copies of the claim to the Federal Tax Administration of Switzerland, Eigerstrasse 65, CH 3003 Berne, Switzerland, no later than 31 December of the third year following the calendar year in which the dividend became due. Rights to repayment arising in one calendar year must be claimed in a single claim. The relevant Form 86 can be found or ordered on the homepage of the Swiss Federal Tax Administration (http://www.estv.admin.ch)."

The remaining 15% is treated as a credit against UK tax, so if OP pays 32.5% on those dividends, the full 15% is set against that liability, but if OP only pays 7.5% UK tax, the credit simply extinguishes that liability.

The_Realist

Potentially a stupid question, but how do I send something to the 'UK Tax Office'?