Hammered by Irish dividend withholding taxes and stingy double taxation agreement

[dingdong]

I have a large holding of Accenture shares that are domiciled in Ireland (despite being a US company).

Ireland now deducts 25% dividend withholding tax.... but the double taxation treaty with the UK only allows for 15%. Is it common for double taxation treaties to not cover all the tax you've paid? It basically means I am paying 10% too much tax unless I can reclaim the difference from Ireland.

Having tried to reclaim it from Ireland.... I've provided a statement from Accenture confirming they have withheld the tax and the Irish government account number they've paid it into. I also have my consolidated tax statement from HSBC showing all my dividends and the Irish DWT tax deducted.

However the Irish tax office is insisting that I provide proof of the dividend going from Accenture to HSBC even though they accept it is a nominee account so will basically be a single dividend voucher for thousands of customers combined that bears no reference to me. HSBC will never provide me with that dividend voucher as it would clearly not be specific to me.... and even just trying to explain the issue to the call centre would be impossible. It's not like HSBC would randomly have paid me a dividend without receiving it themselves so the request seems ridiculous.

It's almost like it's a deliberate approach by the Irish tax office to make it so difficult to reclaim any tax that people just give up!!

Has anyone else managed to reclaim dividend withholding tax from Ireland successfully??

[XFool]

I have a large holding of Accenture shares that are domiciled in Ireland (despite being a US company).

Ireland now deducts 25% dividend withholding tax.... but the double taxation treaty with the UK only allows for 15%. Is it common for double taxation treaties to not cover all the tax you've paid? It basically means I am paying 10% too much tax unless I can reclaim the difference from Ireland.

Yes. e.g. US witholding tax 30%. Double taxation treaty with UK leading to 15% witholding tax for UK holders.

[Newroad]

Hi XFool.

I'm no tax expert nor do I have experience with this particular problem.

Notwithstanding the above, I understood that the point of double taxation agreements was not to allow people to pay a lower rate of tax (15% vs 25% here) but rather, to stop them paying both (15% + 25% here).

Following that logic, I would have expected 15% of the 25% paid would be claimable as a credit within the UK tax system. I further wonder whether the additional 10% paid might be available to offset other dividend tax paid in the UK (but that would be a separate question).

In any case, this may be of https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710099/DT_Digest_April_2018.pdf

[DingDong] The other thing to be wary of in Ireland is "Deemed Disposals" - where you have a tax event triggered logically, even if you haven't actually sold.

Regards, Newroad

[88V8]

Has anyone else managed to reclaim dividend withholding tax from Ireland successfully??

I used to have a holding of the Ulster Bank 11.75s, and I recall years ago a thread on TMF about the near impossibility of getting the WHT refunded. In my case the holding was small enough that I never bothered.

Perhaps sell your shares... although they look strangely illiquid ... the net yield should be easy enough to replace elsewhere.

V8

[yorkshirelad1]

I have a holding in CRH (in a broker nominee), which in the past has paid dividends that suffered Irish withholding tax. I'm afraid I never bothered trying to reclaim the Irish withholding tax either. CRH has now moved its listing to NYSE, and I am hoping (fingers and everything else crossed) that they will be paying US dividends and the withholding tax situation will be covered by a W8-BEN form.

[XFool]

Has anyone else managed to reclaim dividend withholding tax from Ireland successfully??

I used to have a holding of the Ulster Bank 11.75s, and I recall years ago a thread on TMF about the near impossibility of getting the WHT refunded. In my case the holding was small enough that I never bothered.

I remember a discussion on TMF wrt recovering Spanish witholding tax on Santander shares. The general opinion was "Good luck with that!"
An exception in that case being BNC shares held in the Santander run nominee account, where Santander did automatically arrange for its recovery.