S&S ISA and Witholding Tax question / Assumptions (E.g. W8-BEN)

On-the-coast

Hello,
I'm looking at buying some NYSE listed shares to hold in my Lloyds S&S ISA.
I know I'll have to complete form W8-BEN (and I'm familiar with that form because i have some shares in a US company already via my workplace)
I'm assuming that from a UK ISA perspective, I don't have to worry about taxation because:
    a) the UK taxed proportion of the dividends is in the ISA wrapper
    b) the US taxed proportion is deducted before it ever gets near my account
from memory i think i'd lose 15% of the US generated dividend to the the US taxman (the witholding portion)
Is this correct - anything else i'd need to think about?
Note: I'm familiar with the risk of currency fluctuations, etc. However from an industry knowledge perspective i work and travel for a US company, and my market / industry knowledge is far more US based that it is UK based, so I'd like to start investing more in areas I'm familiar with.

masonic

Yes you'll lose 15% withholding tax on dividends, but there won't be anything you'll need to explicitly pay. The other issue is that ISAs cannot hold foreign currency, so there will be forex costs when buying, selling and receiving dividends. In a SIPP or general investment account, you may have the option to hold cash in USD.

On-the-coast

Thanks.  

Interesting point on foreign currency. 

I intend to invest as accumulation (dividend reinvestment)
also the first share I’m looking at has a Particularly low dividend, but I’ll watch out for unexpected costs. 

WhistleBlow

I was in a SAYE share scheme. I have had the scheme since 2009 and just let it ride. I have completed the W8-BEN forms on a regular basis. My question is, I am looking to retire, and I want to start selling some of the shares. Will I pay the US Withholding Tax and Capital Gain Tax( if over £3k)? I have asked around and If I pay £350 the FA may be able to fix it for me, Not confident as I have tried 3 other FA's and "Fluffy" is my description. I would never have gone down this route If I knew the hassle, hope you can help?

eskbanker

WhistleBlow said:

I was in a SAYE share scheme. I have had the scheme since 2009 and just let it ride. I have completed the W8-BEN forms on a regular basis. My question is, I am looking to retire, and I want to start selling some of the shares. Will I pay the US Withholding Tax and Capital Gain Tax( if over £3k)? I have asked around and If I pay £350 the FA may be able to fix it for me, Not confident as I have tried 3 other FA's and "Fluffy" is my description. I would never have gone down this route If I knew the hassle, hope you can help?

If you're a UK resident then gains you make on selling will be subject to CGT, albeit you have the annual £3K exempt amount, so you need to be able to track the weighted average acquisition cost for the shares.

Withholding tax will typically apply to income, such as dividends, rather than sales.