Reclaiming US Withholding tax

OliverLacon

I've sold some shares via UBS in the USA. Apparently my W-8BEN from was out of date and they have withheld part of the proceeds as tax. I'd like to try to reclaim the money withheld. It isn't a huge amount ($1000) and using a third party company to carry out the work would eat up most of that amount. Therefore I'd like to try a DIY reclaim.

I think these are the steps I need to take:-
1. Fill in form W7 (Application for IRS Individual Taxpayer Identification Number) and provide supporting documents.
2. Fill in form 1040NR (US non-resident alien income tax return) with the details for the tax withheld
3. Fill in form W-8BEN (Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting)
4. Get a copy of Form 1042-S (Foreign Person's U.S. Source Income Subject to Withholding) from UBS that shows details of the tax withheld.
5. Send off all the forms to the address in Austin as per the instructions for filling in the W7. I might need to wait until the new tax year before doing this though.

Have I missed anything?

With regard the W7 form, I'll need proof of UK residency and proof of ID. Passport is the best - but I wouldn't want to send that off to America. What documents have other forum members successfully used?

chris_the_bee

OliverLacon said:

I've sold some shares via UBS in the USA. Apparently my W-8BEN from was out of date and they have withheld part of the proceeds as tax. I'd like to try to reclaim the money withheld. It isn't a huge amount ($1000) and using a third party company to carry out the work would eat up most of that amount. Therefore I'd like to try a DIY reclaim.

I think these are the steps I need to take:-
1. Fill in form W7 (Application for IRS Individual Taxpayer Identification Number) and provide supporting documents.
2. Fill in form 1040NR (US non-resident alien income tax return) with the details for the tax withheld
3. Fill in form W-8BEN (Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting)
4. Get a copy of Form 1042-S (Foreign Person's U.S. Source Income Subject to Withholding) from UBS that shows details of the tax withheld.
5. Send off all the forms to the address in Austin as per the instructions for filling in the W7. I might need to wait until the new tax year before doing this though.

Have I missed anything?

With regard the W7 form, I'll need proof of UK residency and proof of ID. Passport is the best - but I wouldn't want to send that off to America. What documents have other forum members successfully used?

If you owe more than $1,000 equivalent in UK tax and if you are, or could apply for, Self Assessment then you could claim the USA withholding tax to offset any UK tax. However, I am not a learned tax consultant.

wmb194

chris_the_bee said:

OliverLacon said:

I've sold some shares via UBS in the USA. Apparently my W-8BEN from was out of date and they have withheld part of the proceeds as tax. I'd like to try to reclaim the money withheld. It isn't a huge amount ($1000) and using a third party company to carry out the work would eat up most of that amount. Therefore I'd like to try a DIY reclaim.

I think these are the steps I need to take:-
1. Fill in form W7 (Application for IRS Individual Taxpayer Identification Number) and provide supporting documents.
2. Fill in form 1040NR (US non-resident alien income tax return) with the details for the tax withheld
3. Fill in form W-8BEN (Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting)
4. Get a copy of Form 1042-S (Foreign Person's U.S. Source Income Subject to Withholding) from UBS that shows details of the tax withheld.
5. Send off all the forms to the address in Austin as per the instructions for filling in the W7. I might need to wait until the new tax year before doing this though.

Have I missed anything?

With regard the W7 form, I'll need proof of UK residency and proof of ID. Passport is the best - but I wouldn't want to send that off to America. What documents have other forum members successfully used?

If you owe more than $1,000 equivalent in UK tax and if you are, or could apply for, Self Assessment then you could claim the USA withholding tax to offset any UK tax. However, I am not a learned tax consultant.

This only works for the 15% a valid W8-BEN would have meant withheld as this is the double taxation treaty rate. HMRC won't care you've paid 30%. it'll only allow you the 15%*. This is assuming the shares are held in a taxable GIA.

If the OP wants the 15% he can reclaim he's going to have to jump through the US tax administration's hoops...

 *Think about it, otherwise it will be giving you full UK tax relief on a foreign tax.

OliverLacon

The tax withheld is from the proceeds of selling shares. If the W-8BEN had been in place, this type of transaction normally is not taxed by the IRS It is subject to CGT in the UK though. I think the 15% / 30% amount mentioned by Chris applies to dividends.