US tax. Witholding tax amounts from US share dividends
Discussion
I have a number of shares in US companies bought via save as you earn schemes.
The company was US owned but I only ever worked for them in the UK
Checking up on my account, I see that every time they send me a dividend cheque, some money is withheld. It now amounts to many hundreds of Dollars over the years.
Every three years, I send the company that manages the shares a W8-Ben to confirm I am not US resident / citizen
The dividends are below the HMRC £2000 pa dividend threshold.
Is there a way to get this money back at all?
The company was US owned but I only ever worked for them in the UK
Checking up on my account, I see that every time they send me a dividend cheque, some money is withheld. It now amounts to many hundreds of Dollars over the years.
Every three years, I send the company that manages the shares a W8-Ben to confirm I am not US resident / citizen
The dividends are below the HMRC £2000 pa dividend threshold.
Is there a way to get this money back at all?
You have described my situation exactly. I have been in the same situation for well over 20 years and the annual dividends I've received net of withholding tax is rather more than you. Nevertheless, the situation is the same.
I do UK self assessment in the UK. I complete the foreign dividends sections. This includes recording the USA dividends gross and the withholding tax. The latter is then deducted from my overall tax due as calculated by HMRC. So,in my opinion, as USA withholding tax is offset against my overall UK tax liability, with my total income declared including foreign dividends, it looks like I have "recouped" the USA withholding tax.
If you are in the same situation it's imperative that the foreign sections of self assessment are complete correctly in order to ensure you get the proper tax treatment. It's easy to get it wrong!
I also complete the W-8BEN form on a regular basis. Failure to do so means that dividends arising in the USA are taxed there at a higher rate than USA withholding tax so the amount received net in the UK is reduced. This has happened to me once but I was able to sort it out and get the overpaid USA tax paid to me eventually.
R.
I do UK self assessment in the UK. I complete the foreign dividends sections. This includes recording the USA dividends gross and the withholding tax. The latter is then deducted from my overall tax due as calculated by HMRC. So,in my opinion, as USA withholding tax is offset against my overall UK tax liability, with my total income declared including foreign dividends, it looks like I have "recouped" the USA withholding tax.
If you are in the same situation it's imperative that the foreign sections of self assessment are complete correctly in order to ensure you get the proper tax treatment. It's easy to get it wrong!
I also complete the W-8BEN form on a regular basis. Failure to do so means that dividends arising in the USA are taxed there at a higher rate than USA withholding tax so the amount received net in the UK is reduced. This has happened to me once but I was able to sort it out and get the overpaid USA tax paid to me eventually.
R.
You have described my situation exactly. I have been in the same situation for well over 20 years and the annual dividends I've received net of withholding tax is rather more than you. Nevertheless, the situation is the same.
I do UK self assessment in the UK. I complete the foreign dividends sections. This includes recording the USA dividends gross and the withholding tax. The latter is then deducted from my overall tax due as calculated by HMRC. So,in my opinion, as USA withholding tax is offset against my overall UK tax liability, with my total income declared including foreign dividends, it looks like I have "recouped" the USA withholding tax.
If you are in the same situation it's imperative that the foreign sections of self assessment are complete correctly in order to ensure you get the proper tax treatment. It's easy to get it wrong!
I also complete the W-8BEN form on a regular basis. Failure to do so means that dividends arising in the USA are taxed there at a higher rate than USA withholding tax so the amount received net in the UK is reduced. This has happened to me once but I was able to sort it out and get the overpaid USA tax paid to me eventually.
R.
I do UK self assessment in the UK. I complete the foreign dividends sections. This includes recording the USA dividends gross and the withholding tax. The latter is then deducted from my overall tax due as calculated by HMRC. So,in my opinion, as USA withholding tax is offset against my overall UK tax liability, with my total income declared including foreign dividends, it looks like I have "recouped" the USA withholding tax.
If you are in the same situation it's imperative that the foreign sections of self assessment are complete correctly in order to ensure you get the proper tax treatment. It's easy to get it wrong!
I also complete the W-8BEN form on a regular basis. Failure to do so means that dividends arising in the USA are taxed there at a higher rate than USA withholding tax so the amount received net in the UK is reduced. This has happened to me once but I was able to sort it out and get the overpaid USA tax paid to me eventually.
R.
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