Remove ads

Introducing the LemonFools Personal Finance Calculators

SIPP tax voucher

Discuss Brokers, trading, fees, experiences
doug2500
Lemon Slice
Posts: 265
Joined: November 4th, 2016, 11:51 am
Has thanked: 43 times
Been thanked: 77 times

SIPP tax voucher

#220867

Postby doug2500 » May 11th, 2019, 2:17 pm

Afternoon all,

It's my understanding that dividends in a SIPP are tax free, so why would my broker give me a consolidated tax voucher for my SIPP? Is this normal?

It's not a case of just doing one for all accounts because they haven't for an ISA.

Doug

JEANHILL
Posts: 4
Joined: May 14th, 2019, 9:58 am
Has thanked: 1 time

Re: SIPP tax voucher

#222016

Postby JEANHILL » May 16th, 2019, 9:53 am

Good morning,
A broker should not give you a tax voucher for a SIPP account, because, you are correct, it is a tax free account. Besides, the SIPP account is legally owned by the SIPP trustee(s), and not the beneficiary. Tax vouchers should not be given for ISAs either.
Best regards,
Jean

Breelander
Lemon Quarter
Posts: 2579
Joined: November 4th, 2016, 9:42 pm
Has thanked: 393 times
Been thanked: 762 times

Re: SIPP tax voucher

#222092

Postby Breelander » May 16th, 2019, 12:36 pm

doug2500 wrote:It's my understanding that dividends in a SIPP are tax free, so why would my broker give me a consolidated tax voucher for my SIPP?


SIPPs are only free from UK tax, if you hold foreign shares in your SIPP or ISA they are subject to withholding tax levied by the country of origin. In an ISA this tax cannot be reclaimed, but in a SIPP they may (depending on the country) be reclaimed in part or (for the US) in full. Not all SIPP brokers can do this though.

The standard WHT on US dividends is 30%. This is reduced to 15% under the UK-US DTA, which is the rate that will apply whether you hold US stocks outside or inside an ISA. But if you hold them in a SIPP and your SIPP adminstrator is thorough enough, you can get them paid gross of all tax....

...not all brokers are able to pay SIPP dividends with zero WHT. So if you intend to hold US stocks in your SIPP and your US dividend income is large enough that the extra 15% could be handy, it’s worth checking whether your broker does....
https://the-international-investor.com/ ... s-isa-sipp


Return to “Brokers and Share Dealing”

Who is online

Users browsing this forum: No registered users and 2 guests