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None of us mind sensible posters asking reasonable questions.
Unfortunately neither of those applied to you - and you seem fully unable to understand the answers anyway.
Still at least you're happy with your incompetent broker and the US Govt are v happy with your contribution to their coffers.
Everyone's a winner :-) Well except for your cat.
Yawn !!!
It just won't go away, will it. Must do all your tiny minds in.
Urban, as per VM's response, in my HL SIPP it's 0% and in my ISA it's 15%.
From previous posts on the issue it seems different brokers / banks all handle the complexity of this arrangement differently so any responses will either be generic "what should happen" or specific "my broker does X."
Some do it well, some don't.
Urban, This comes up every so often on this board, I hold all my DEC shares in my Sipp and my wife's SIPP and pay 0% witholding tax on the dividends. In the past I also held some in an ISA and from what I remember paid 15% then. My broker is HL. If you have a significant holding it might be worth switching brokers if they can't be ar**d to fix it. 30% tax soon adds up!
I've been in contact with Wren Smith from DEC, asking what relevance CREST has to the tax rate, as my broker is blaming CREST events for ignoring the treaty tax reduction. He's looking into this issue for me and as part of his last reply included iWeb's thoughts on the matter (not my broker by the way). I've copied and pasted the relevant section below.
UK listed shares paying US sourced dividends
Ordinarily if you complete a W-8BEN form you will only pay the 15% Withholding Tax rate instead of 30% on US listed shares paying US sourced dividends. For UK listed shares paying US sourced dividends a 30% Withholding Tax rate is applied even if you have a W-8BEN form in place.
For example, you would receive $70 on a $100 dividend.
Would be interested to know anyone's thoughts on this, apart from the bell-end who thinks having his dividend payments reduced is just boring....dude!
Agree with RedTom. If you are (a) US resident and (b) your shares are in a US brokerage, then there should be no WHT in your case. The point of WHT is literally to withhold tax on dividends (and sometimes other flows) being transferred abroad, which isnt your case.
This is what I was thinking so it might actually be more straightforward and be no different than any other US equity holding. I sure hope so.
ArbInv,
The fact that you are US tax resident and hold the shares in a US brokerage account means that my advice may be irrelevant to you.
DEC is US tax resident such that dividend distributions are subject to US withholding tax rules (which is unusual for a UK listed company).
For us in the UK the WHT rules are dictated by the US/UK double taxation agreement which state that the standard WHT rate is 30%. By completing a W8-BEN the rate is reduced to 15%. If shares are held in a pension wrapper (like a SIPP), the rate is reduced from 30% to 0%.
There has a lot of discussion on here as some institutions have not applied these rules correctly.
I don't know but I would imagine that US WHT would not apply to US residents, particularly if shares are held in a US brokerage account.
Afraid you will get little help here, except from one guy maybe. Most of the posters are ignorant bully boys, wouldn't know a treaty if it smacked them round the head. I've decided to stick around because I don't accept bullying, and talking about the with-holding tax issue makes them cry like little girlies. It is so much fun.
Sorry to reignite this "yawn" subject but anyone any experience of how this should be taxed if held in a US taxable brokerage account. I am a US tax resident and should have done more research on the tax aspect of holding this before buying but spent my time reviewing cash slows not tax international tax treaties. Any help much welcomed?
Best thing that can happen with DEC is a US listing. Where can you pick up a 10% dividend in US?
Who is complaining not me.
I called them they altered it, simple no major issue
Because they are accepting it is a fault with their brokers. You keep insisting it is a DEC issue, it is not. The issue is how some brokers (a minority) deal with UK /US tax legislation.
How hard is that to understand?
Very glad to hear it's your final message.
So how come it is suddenly alright to discuss the withholding tax fiasco, after al the abuse I got, especially from dusterinmong, who is now complaining himself. You absolute hypocrite !!!
Thanks to recklessferret for the link.
For those affected, I once again e.mailed Theresa, our outgoing Investor Relations vice president, asking her to leave a message on her desk for her replacement about the ongoing problem for a few investors. I told her that I would be selling out, either when I have a decent profit or after the September dividend if nothing can be achieved before then.
Perhaps if others affected did the same, we may get somewhere. My final message on the subject, unless any hypocrites have anything to say.
Just got mine back from IG Altered it to 15% after complaining
reclessferret, thanks for the information and the link. I have a clearer picture. I have lodged a formal complaint with Stocktrade. What annoys me most is this the shares are held within a dealing account within my pension fund, so the rate of tax should be 0%, while I am currently paying 30% on all US dividends. I didn't pay much attention before as my US shares mostly have very low yields. I bought DEC about 3 months ago. Thanks once again for most helpful information.
Thronegames. The following linked article I found helpful to explain this. I am with iWeb and not surprisingly with their being part of Halifax they also told me over the phone that the W8 Ben form is a non-starter for DEC. A lot of issues are explained in the article, not least that, as has been said on this board, some brokers are more helpful than others on this but the piece also suggests how it is possible for individuals to make claims DIRECT to USA IRS for a refund -and there is a Dept in the US dealing specifically with overseas IRS matters, so if the amount is substantial enough to matter to any investor, then a claim can be made to the IRS. There is even a specific "Refund Form" which can be completed and sent (possibly emailed)to the IRS in the USA . See further https://the-international-investor.com/investment-faq/reclaim-withholding-tax-foreign-dividends-isa-sipp
Ash, Halifax do not know what they are talking about.
Whilst it is a UK quoted stock it is also considered a US company based on US tax law. Therefore any dividends that it pays are subject to US tax rules and in particular US WHT rules.
As stated before by completing a W8-BEN the wht rate is reduced to 15% (from 30%) for share accounts and ISAs etc.
Under the UK/US tax treaty the wht rate is reduced to 0% when held in a pension, eg a SIPP.
*because it's a...
I use Halifax for trading and i have had the following reply when asking about the W8-BEN form...
Unfortunately because itit'a uk stock and trades on the LSE, even though the US pay the dividend, it's not affected by the W8-BEN form. The W8-BEN form only works for stock that trade as overseas and not ones like this that are uk in terms of listing. So the W8-BEN form works for the likes of Apple and Facebook but not DEC.
I hope that clears things up for everyone
Cheers
Ash
Thanks Redtom and coolbeans. As a result of your replies I will become somewhat more assertive with my pension provider. Yes I am referring to individual shares held. My pension fund is with Standard Life Ireland but I know that same rules apply with little or no variation. Very annoyed. I get the full amount of all of my dividends from my Irish and UK shares.
Throne,
The principles are:
Under the UK:US double tax treaty:
Standard WHT rate is 30%.
If you do a W8-BEN this should be reduced to 15%
But if the shares are held in a pension wrapper (eg SIPP) then the rate is reduced to 0% under the DTT.
Whilst these are the principles it appears that there have been inconsistent practices adopted.
My shares are in SIPP and 0% is deducted. My wife has a few shares in a normal share account and 15% was deducted.
You should be paying 0% if it's a single share in a SIPP. If it's part of a fund I don't think you can do much.
30% of my last dividend was withheld. Yes I know this has been discussed on this board in the past and I have reviewed some posts and I am none the wiser. I have a self directed account with Stocktrade (now Embark) through a pension fund with Standard Life.
I have been communicating with both parties as the rule in principle of any pension fund is that NO tax is payable on gains or income accrued therein. 30% withheld on all dividends from U.S. domiciled companies it seems. I have a W8-BEN filed. Someone here suggested that given W8BEN that it should be 15% withholding tax. Someone else suggested that it is only institutions owned by banks that withhold tax.
Given what I know above, can anyone tell me in a couple of sentences whether I should a) suck it up (30%); b) pursue them for 15% tax only or c) pursue them for 0% tax. I have retired from my pension fund. Lol AND I'm wondering if I can go after them retrospectively!
I really would appreciate any advice or information. Certified Financial Advisor has not one clue. Standard Life have not one clue. Any clues would be welcome! TIA.