# Withholding taxes on dividends for companies listed in UK



## gibor365 (Apr 1, 2011)

Anuone knows if there are Withholding taxes on dividends for companies listed in UK, for example RDS.B and BP?

I read somewhere that US guys don't pay taxes on UK listed stocks...and what about us, Canadians?


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## Eclectic12 (Oct 20, 2010)

gibor said:


> Anuone knows if there are Withholding taxes on dividends for companies listed in UK, for example RDS.B and BP?
> 
> I read somewhere that US guys don't pay taxes on UK listed stocks...and what about us, Canadians?


By my reading of the article below, it looks like up to 15%, depending on the UK gov't.



> 2. Dividends paid by a company which is a resident of the United Kingdom to a resident of Canada may be taxed in Canada. Such dividends may also be taxed in the United Kingdom, and according to the laws of the United Kingdom, but provided that the beneficial owner of the dividends is a resident of Canada the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.


Dept of Finance Web site:
http://www.fin.gc.ca/treaties-conventions/UK_-eng.asp


This other web site says the UK does not charge withholding tax:
http://topforeignstocks.com/2011/01/23/withholding-tax-rates-by-country-for-foreign-stock-dividends/


Cheers


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## bettyboop (Dec 13, 2011)

I have never had witholding taken out of any UK stocks, I believe it's the same for South Africa and Taiwan.


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## liquidfinance (Jan 28, 2011)

In the UK dividends are paid net of tax.

The price quoted is the price you get paid without any extra with holding taxes being applied.

In a way it work in a simplified way to your dividend tax credit

More detail can be found here 

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/DG_4016453



> Understanding the dividend tax credit
> Companies pay you dividends out of profits on which they have already paid - or are due to pay - tax. The tax credit takes account of this and is available to the shareholder to offset against any Income Tax that may be due on their 'dividend income'.
> When adding up your overall taxable income you need to include the sum of the dividend(s) received and the tax credit(s). This income is called your 'dividend income'.
> How tax credits are worked out
> The dividend you are paid represents 90 per cent of your 'dividend income'. The remaining 10 per cent of the dividend income is made up of the tax credit. Put another way, the tax credit represents 10 per cent of the 'dividend income'.


In short if a dividend is quoted as paying 10 pence annually then you will receive 10 pence.


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## gibor365 (Apr 1, 2011)

Thanks for replies 

I know that for Australian stocks there are some so-called "frank" dividend -> there is no withholding taxes on dividedns (I know that Aus banks offers them), and others pay regular dividends (taxable).

On other hand, as i read, US has treaty with UK (like with Canada) -> no witholding taxes on Retirement acconts...

I'm wondering if Canada has trety with UK (like US) or here more Australian cituation applies /


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## liquidfinance (Jan 28, 2011)

With the UK dividends even if I hold them within the equivalent of your RRSP (SIPP) there is no credit applied.

The only difference is can see is that if you hold a UK stock in an RRSP then you will not be taxed at your marginal rate within Canada. But the payment received would be the same regardless of being held within or without an RRSP.


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## Toronto.gal (Jan 8, 2010)

More discussions on the topic here:

http://www.canadianmoneyforum.com/showthread.php?t=9621


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## rassmy (May 7, 2010)

No, you wil get the full dividend, I have shares in RDS.B, i get full dividend last quarter.


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