European stocks - taxes

[mprez22la]

Hi, does anyone know how tax would work if I were to buy stocks from European companies? For example, I have some stocks in Ericsson and was considering getting stocks in Roche. Would this be tax free in an ISA?

[monabri]

As far as I understand it (!).... you would still have to suffer a reduction in the dividend due to " withholding " tax even in an ISA. However, when you sell, there would be no need to worry about capital gains issues.

[ADrunkenMarcus]

I hold a Finnish stock (Kone) and two USA stocks (MasterCard and PayPal) inside an ISA. As such, you pay no capital gains in the event you sell (nor could you claim a loss if you sold at a loss). However, you do have a reduced dividend - Finland's dividend withholding tax is 30%, rising to 35% in 2021 and is deducted at source; for the American shares, the dividend withholding tax is reduced to 15% by a tax agreement between the USA and UK.

Best wishes

Mark.

[monabri]

The reduced US rate would require submitting a W-8BEN form to your broker ( every 3 years).

[ADrunkenMarcus]

The reduced US rate would require submitting a W-8BEN form to your broker ( every 3 years).

Yes, I make sure I do this. I don't think you have to worry in a SIPP, though, as you would get USA dividends gross.

Best wishes

Mark.

[1nvest]

Hi, does anyone know how tax would work if I were to buy stocks from European companies? For example, I have some stocks in Ericsson and was considering getting stocks in Roche. Would this be tax free in an ISA?

Sweden applies a 30% dividend withholding tax, reduced to 0% according to residency. Post Brexit (January) and what 'treaties' may or may not be in place between UK residents and Sweden ???

I'd be more inclined to defer until after the post January situations become clearer rather than perhaps buying now only having to move in 6 months/whatever time. The Tories have a history of leaving things right up to the wire, inducing uncertainty/costs for the private sector/public having to deal with at incredibly short notice. Governments are supposed to strive to induce certainty/stability - but certainly that isn't the case with the present mob.