French Withholding Tax

[PuppySmasher]

Does anyone have experience with holding French positions - and if so is your broker giving you the (newish) low 12.8% withholding tax rate on dividends for non-French resident individuals?

Long story short, with oil prices being low and exciting just now I am interested in TOTAL S.A - as they have both a nice looking dividend yield but also good recent dividend cover compared to eg BP and Shell.

This is just a side bet though for entertainment (my main portfolio is very boring diversified ETFs) - and from what I see some brokers still pass on a 30% WHT rate re France for their own ease. I'd not be bothered with this if I have to write a form to HMRC then French government each year to get an annoying small refund.

So - I'm wondering if anyone has experience here?

[1nvest]

France has tended to be more dynamic with its withholding tax regime. IIRC for instance it has in the past opted to apply a 78% rate against some 'unfriendly' nation investors. Which in itself is a uncompensated risk factor that can be avoided. Imagine a situation where you'd held long enough to have seen share prices rise with inflation, and then they opted to apply a 50% withholding rate due to whatever domestic political/economic pressures/objectives and for you to move that total holding elsewhere would incur a sizeable 'capital gain' - because your stock value had doubled since the purchase date due to 4% inflation over 20 years.

If held in ISA to avoid the capital gain tax if you do have to move it, then each and every dividend will incur currency conversion spreads/costs - as you can't hold foreign currencies in a ISA.

Whether tax harvesting (i.e. selling # shares to levels that doesn't exceed your yearly capital gains tax allowance and repurchase those shares again so that the 'cost base' is uplifted) might work outside of ISA ??? That has all sorts of complications involved such as not being able to buy back in again before 30 days ...etc. (For tax purposes shares in the same company/fund sold and then repurchased again within 30 days are considered as not having been sold/re-bought).

[PuppySmasher]

Thanks for the take - though I am definitely still interested to hear if any brokers are applying the 12.8% rate automatically.

I'd be holding it outside an ISA, as you mentioned to avoid FX charges - and the WHT would cover the 7.5% tax above dividend allowance. Agreed that it's an uncompensated extra risk as holding individual stock but here I don't mind as its just a small side bet, to keep me interested and saving into my total portfolio.

Cheers

[taken2often]

The French Government are pretty corrupt on this matter. They ignore EU law relating to this tax and Pension Funds. I had one share in my pension fund and paid through the nose with withholding tax. Sold off and would not touch France with a barge pole. I have about 36 US shares in my pension and they do not charge any tax