Dividends and Tax

Hi team, first post here - I’ve had a look through all the support but can’t quite get my answer.

I am using the Trading212 Invest account.

I am in the UK and recieve dividends from US based stocks. I filled out a W8EN form during set up.

My question:

For simplicity, let’s say I have a £1 dividend. The dividend that turns up in my account;

Is it:

  1. Completely untaxed (leaving me to complete my tax return in the UK) so the £1 I see is the full amount.

Or

  1. The £1 is after-tax, so it would’ve been £1.30

Or a third alternative, I would see £1.15 because I’ve compelted a W8EN form?

I hope this makes sense.

Thanks for your time.
Chris

If the US company pays a $1 dividend then $0.85 will appear in your Trading 212 account. So $0.15 has been deducted. Depending on your UK income you will have further tax to pay via your self assessment return. It can be 0, 0.325-0.15 or 0.381-0.15. You take a credit for the US tax withheld.

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Amazing, thanks for the quick reply, that’s really really helpful!

I haven’t bought any $ stocks yet but I was under the impression the W8BEN was automatically generated? Or is that only recently automated?

you used to need to fill it out yourself and submit, but it is now settled automatically by the system when you purchase a US stock and are set to receive a dividend. you should see an in-platform popup that requests you to check and confirm your details.

newer accounts would seem to have the W8BEN made as part of their account setup so that its ready in case they acquire US stocks.

additionally, W8BEN is a yearly form so the system would likely display a yearly prompt for confirmation of details so you are always accurate and uptodate.

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Actually, valid for year in which signed, plus 3 calendar years, then needs renewal.

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I stand corrected xD thanks for the clarification. spent too many hours just shopping today…