To see Vanguard's Irish domiciled ETFs, go to vanguard.co.uk. Select the Financial Advisers tab for more detailed information of their products. VWRL is a similar ETF to VT. Dividends collected by VWRL will have had withholding taxes deducted according to various tax treaties between Ireland and the domicile of the companies. For US shares, this will be 15%. Dividends paid out by VWRL will be done without withholding taxes, because Ireland does not levy withholding taxes on ETFs - one of the reasons ETFs are domiciled there. But of course, you may pay tax on those dividends.
You appear to be right about this. The big one for me is Vanguard Developed World ex UK. For OEICs, I found:
http://www.mandg.ch/en/qualified-invest ... tructures/
This says:
"Due to the wide range of tax treaties in place with the UK, withholding tax on investment income is often reduced."
So it appears that the double taxation treaties apply irrespective of the tax status of the investor in the fund.
The $1000 is also subject to UK income tax, which is 7.5% for basic rate taxpayers, but basic rate taxpayers can offset the 15% withholding tax ($150), gone to the IRS, against the tax liability $75. In effect this discharges the UK income tax liability.
That is fair enough for a US based ETF. It is just like any other US stock. A UK based OEIC also pays withholding tax too. My dividend slips from Vanguard do not list the withholding tax, and there is no box for it in the Unit Trusts and OEICs section of the tax return. As far as I am able to tell, the withholding tax paid by my Vanguard fund cannot be offset against UK dividend tax.