Which share(s) are subject to withholding tax?

[Newroad]

Afternoon All.

I have had a small amount of withholding tax taken with respect to one or more of the shares below. I'm not bothered about the amount, just want to do my tax correctly. I've tried a Google Query, but can't write one that produces the needed output. There probably is a way to find out on IBKR, but I haven't figured it out yet (their tax reporting is US/Calendar Year centric).

BA.
BATS
BLND
BP.
BT.A
GLEN
GSK
KGF
LAND
LGEN
MNDI
MNG
NG.
RIO
SBRY
SHEL
SGE
SMDS
SN.
TW.
UU.
VOD

I believe LAND is at least one (I've got that from IBKR) - but I'm guessing knowledgeable TLF'ers may be able to advise by inspection?

Regards, Newroad

[daveh]

Held in an ISA or a GIA? If held in an ISA no tax on LAND

[Newroad]

Hi Dave.

No, these are in a general trading account, which I assume is what you mean by GIA (not an ISA or SIPP).

Regards, Newroad

[XFool]

Can you not find out simply by looking at the dividend payment statements in the account?

[Newroad]

Hi XFool.

There may be an easy way to do as you suggest - but I haven't figured it out yet. If I had, I wouldn't be asking.

Regards, Newroad

[Dod101]

With holding tax (not really what it is called) is charged only on PIDs in the UK, paid by REITS especially if they are not held in a SIPP or an ISA. !5% I think is the charge. If they are held in an ISA or a SIPP, the manager will often be able to pay the PID gross or you might find that it is paid a few weeks later once the manager has recovered the payment.

So it could be that a dividend from say a REIT like B Land will be paid net of the 15% but the REIT will usually tell you if the dividend is to be paid as a PID or some part of it is.

Dod

[SalvorHardin]

I don't recognise all of the codes on your list, but since this is an HYP board I'll assume that they are all British shares.

In which case it's the 20% tax that's taken off "property income distributions" (PIDs) paid by REITs (I recognise the codes for British Land and Land Securities). PID distributions and the 20% tax deduction are treated as "other income" in UK tax returns.

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).

Hope this helps

[Newroad]

Thanks, SalvorHardin.

I've just deleted a post I made, as it crossed with yours - but essentially confirming all that you said.

Just checking though, if I include the "Withholding Tax" (which appears to be how its referred to, even if inaccurate) in "Other Income" on the tax return, do I include it as a negative as it has been taken away? Or are you saying put the whole LAND dividend in that category (or something else entirely)?

Regards, Newroad

[SalvorHardin]

Thanks, SalvorHardin.

I've just deleted a post I made, as it crossed with yours - but essentially confirming all that you said.

Just checking though, if I include the "Withholding Tax" (which appears to be how its referred to, even if inaccurate) in "Other Income" on the tax return, do I include it as a negative as it has been taken away? Or are you saying put the whole LAND dividend in that category (or something else entirely)?

Regards, Newroad

UK REITs pay two different types of dividend, which are taxed differently. There is the ordinary dividend, which is taxed as a normal dividend.

Then there is the PID, paid net of 20% tax. The other income section has entries for gross, net and tax deducted. Enter all PIDs here.

REIT PIDs in ISAs can be paid gross, with the broker effectively reclaiming the tax at source. Sometimes it is paid net of tax and the broker reclaims it, which can take a few weeks. I have heard of some brokers not reclaiming the tax.

PIDs are paid out of the rental profits (minimum 90% of rental profits must be paid out). Ordinary dividends are paid out of other profits (mostly gains made on property sales).

[monabri]

https://www.britishland.com/investors/s ... %20receive.

See - "Dividends and our obligations as a REIT"

See - "PID & non-PID dividend payments"

The British Land text then states..

"For UK resident individuals who receive tax returns, the PID from a UK REIT is included on the tax return as Other Income.

If completing the return online, in the section "Other UK Income" tick the bottom box "Any other income". On the next page enter the total amount of the PID received (including tax) in "Other taxable income – before expenses and tax taken off", enter the tax deducted in "Tax taken off" and in the box for description of other taxable income state "PID from The British Land Company PLC"."


"The non-PID element of dividends will be treated in exactly the same way as dividends received from other non-REIT UK companies. The tax free Dividend Allowance (£5,000 for 2016/17) will apply to the non-PID element of dividends received by UK resident shareholders subject to UK income tax from 6 April 2016. It should be noted that this Allowance does not apply to the PID element of dividends."

[Newroad]

Thanks, SalvorHardin.

That makes sense - in IBKR's case, it (the PID) appears to be paid net.

HMRC can have the extra £7-8 this year (I've completed the form and can't be bothered changing it now) - but I'll know what to do next time.

Regards, Newroad

[88V8]

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).

This also applies to US companies with a UK listing, in my case DEC Diversified Energy.
Deduction 15% unless held in a SIPP, and 30% if your broker can't be bothered to do the paperwork.

V8

[csearle]

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Off-topic discussion about the effect of the abolition of substantial tax relief on dividends that pension funds received on their investments continues here - Chris