Split off from here to keep that discussion on topic. Not sure if this is the right place for it either. Please suggest (and self-report) an alternative place if you feel strongly about it. Thanks. - Chris
SalvorHardin wrote:Withholding tax is not levied on British shares, even if like Smith & Nephew they pay US dollar dividends (American shares OTOH have 15% or 30% withholding tax deducted from their dividends).
Yes, there is no withholding tax on UK shares even for foreign holders of UK shares. And no UK CGT applies to foreign holders either. So UK shares are very tax-friendly for foreign entities and individuals to hold, although of course local taxes may be due.
Note however this was not always the case. There used to be tax withholding on UK dividends, called a tax credit, of 10%. This was reclaimable by a non-taxpayer such as a pension fund, a charity or an ISA. This was abolished by Gordon Brown, and widely criticised at the time as one of his "stealth taxes", and as "the Great British Pension Robbery":
"The chancellor, Gordon Brown, abolished substantial tax relief on dividends that pension funds received on their investments.
The financial effect of this tax snatch was colossal. It was estimated that the loss of this tax relief had extracted, in total, over £118 billion of income by 2014. If this lost income had been even conservatively invested, pension funds may have benefited by an additional £230 billion."
https://theconversation.com/britains-gr ... ast-100844
So the idea that you get the "full" dividend is a bit of a myth, at least if you are a non taxpayer.