The Halifax Share Dealing Self Invested Personal Pension service is unable to arrange for US sourced income to be paid entirely exempt from tax in the US. Within our SIPP a 30% Withholding Tax rate is applied to all US sourced dividends except where the shares are US listed and you have completed a W-8BEN form when 15% Withholding Tax will apply.
Other SIPP providers may offer a zero rate of Withholding Tax on US sourced dividends, which means no Withholding Tax is deducted so all of the dividend is received at the gross amount. We do not currently offer this arrangement and do not offer a foreign Withholding Tax reclaim service.
How this affects your holdings?
US listed shares
If you wish to buy US listed shares that pay US sourced dividends we require you to complete a W-8BEN form. Once we have this form we can apply a reduced 15% Withholding Tax rate.
For example, you would receive $85 on a $100 dividend. Other SIPP providers, depending on their arrangements, may pass on the full $100.
UK listed shares paying US sourced dividends
Ordinarily if you complete a W-8BEN form you will only pay the 15% Withholding Tax rate instead of 30% on US listed shares paying US sourced dividends. For UK listed shares paying US sourced dividends a 30% Withholding Tax rate is applied even if you have a W-8BEN form in place.
For example, you would receive $70 on a $100 dividend. Other SIPP providers, depending on their arrangements, may pass on the full $100.