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tax payable in uk on us stocks?

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tax payable in uk on us stocks?


Postby agomez » June 22nd, 2020, 7:36 am

hi how much tax is payable on purchase& sale of US shares? I know in the US they have tax bands depending how long you hold the stock for? But if you buy from a UK broker like ii, and sign a WEB-EN foreign declaration how much tax is payable? Also is this tax paid by the broker? thanks for your kind advice

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Re: tax payable in uk on us stocks?


Postby SalvorHardin » June 22nd, 2020, 7:58 am

As long as you are not a US citizen, or liable in some other way to pay American taxes, then the only tax payable to the American authorities on American shares is the withholding tax on dividends. This is 30%, which reduces to 15% if you have completed the W-8BEN form. Withholding tax is automatically deducted by the stockbroker. It is possible to receive dividends without having to pay the withholding tax (or reclaim it) if the shareholding is held in a pension fund (a SIPP).

You are still liable for UK capital gains tax on the gains from American shares when you sell (this is collected via your UK tax return). The UK personal allowance for capital gains still applies. There is no stamp duty to pay on the purchase of American shares.

The exception is if you own shares in an American limited liability partnership (or other type of partnership), in which case your dividends are classified as American earnings and you have to complete an American income tax form. There are a few quoted limited liability partnerships listed in New York.

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