Dividend payment and tax

MG2112

II have shares in IAG and recently they payed a dividend. It looks like I have been taxed on the payment. I’m using AJ Bell platform. I thought ISA were tax exempt? 

Thanks for any feed back . 

Strummer22

If the shares are held in an ISA then you should not be taxed on any dividend.

What leads you to believe you have been taxed?

molerat

Spanish withholding tax ?

MG2112

On my statement it says “ Tax in account currency GBP 70.85 “ This is the dividend notification email. 

Many thanks 

RL11

My IAG shares are in a Hargreaves Lansdown S&S ISA and I seem to have received a reduced dividend too - should have got £50.60 but instead got £40.57.
IAG website mentions a Form 210 which says:
"A Qualifying Shareholder is entitled to ask the Spanish tax authority for a refund of an amount equal to the difference between the tax withheld and tax at the Reduced Rate. Where the Reduced Rate is 10%, this amounts to 9.5% of the pre-tax dividend. A refund is claimed by filing a Form 210 and complying with the associated formalities."

I'm not even sure if I'm a "Qualifying Shareholder", never mind how to fill in the form:
"Person performing the self-assessment", "Accrual", "Income obtained", "Taxpayer", "Address in the country of residence", "Taxpayer’s representative", “Determination of the taxable base amount" and "Choose type of tax return". 

Anyone gone through this before and was it easier than it seems? Seems a right palaver to potentially get back £5!!

molerat

RL11 said:

My IAG shares are in a Hargreaves Lansdown S&S ISA and I seem to have received a reduced dividend too - should have got £50.60 but instead got £40.57.
IAG website mentions a Form 210 which says:
"A Qualifying Shareholder is entitled to ask the Spanish tax authority for a refund of an amount equal to the difference between the tax withheld and tax at the Reduced Rate. Where the Reduced Rate is 10%, this amounts to 9.5% of the pre-tax dividend. A refund is claimed by filing a Form 210 and complying with the associated formalities."

I'm not even sure if I'm a "Qualifying Shareholder", never mind how to fill in the form:
"Person performing the self-assessment", "Accrual", "Income obtained", "Taxpayer", "Address in the country of residence", "Taxpayer’s representative", “Determination of the taxable base amount" and "Choose type of tax return". 

Anyone gone through this before and was it easier than it seems? Seems a right palaver to potentially get back £5!!

Not only that, the service is not free so it will likely cost you money, cheaper not to reclaim it.

penners324

MG2112 said:

II have shares in IAG and recently they payed a dividend. It looks like I have been taxed on the payment. I’m using AJ Bell platform. I thought ISA were tax exempt? 

Thanks for any feed back . 

You're invested in a Spanish company, so it's Spanish Withholding Tax

RL11

Contacted Hargreaves. They said they can send me dividend tax vouchers to help with a claim but can't apply on my behalf.
Seems peculiar that for US shares, you just fill in a W-8BEN to avoid tax on US company share dividends but there is no equivalent form for Spanish company shares?

Hoenir

RL11 said:

Contacted Hargreaves. They said they can send me dividend tax vouchers to help with a claim but can't apply on my behalf.
Seems peculiar that for US shares, you just fill in a W-8BEN to avoid tax on US company share dividends but there is no equivalent form for Spanish company shares?

International taxation rules are far from standardised. Canada follows a similar process to the US. In my personal experience of direct equity holdings. France, Germany, Italy and Denmark do not.

RL11

I realise each country can be different but there is a double tax agreement in place, with almost every country around the world. I don't understand why the US seems to be the only country with a form (W-8BEN) so the double tax agreement can be applied, so that dividends are paid with the correct tax rate. I guess other countries are quite happy to take more tax than they should and don't expect many individuals to claim it back.

Gaberdeen

I often lose around 15% on my US and Canadian dividends purely because of their withholding tax.

All my investments are in ISA wrappers so it was galling to learn that it wasn't exempt as I'd hoped.