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What is withholding tax?

The following tax facts should be viewed as an indication of the rates and allowances available and relate to the current tax year (2019/2020) unless stated otherwise. Tax law is notoriously complex and we cannot replicate every rule, nuance or exemption here. Therefore you should not make, or refrain from making, any decisions based on this information alone. If you are in any doubt as to the suitable course of action we recommend you seek tax advice. Remember tax rules can change and depend on your personal circumstances.

Withholding tax is a tax levied by an overseas government on dividends or income received by non-residents. For example, the US Government charges non-US residents’ withholding tax of 30% on any income received from US investments.

The UK government has double taxation agreements (DTAs) in place with many countries to reduce the amount of tax paid by UK residents. In these circumstances, it may be possible for investors to reclaim all or part of the withholding tax paid. You will need to contact the relevant tax authorities to determine their requirements as these may vary from country to country.

Where possible we will claim reduced withholding tax payments on US and Canadian stocks for investors who have provided us with a valid W-8BEN form. However, we will not reclaim tax credits on dividends or income from any other foreign countries.

If you are a resident in the UK and the form is for an account held by a UK individual, the easiest way to submit your W-8BEN form is through your online account:

  1. Log in to your account
  2. Select the 'Account settings' tab
  3. Select 'Share dealing and live prices' and follow the on-screen instructions

Alternatively, you will be taken through the process when you make your first US stock trade online.

If you are not a UK resident and/or the form is for an account that is not held by you individually, you will need to download a W-8BEN form from our website. Read more about W-8BEN forms.

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