OK, makes sense. What I care about is if this type of payment (if it somehow differ from standard dividends payments which I donāt know) will be also included in yearly dividends statement with confirmation that tax was already paid.
So far I received 2 types of dividends. āOrdinaryā with net amount and withhold tax (e.g. MSFT) and āReturn of capitalā with gross amount and 0 withhold tax, e.g. TSM.
Says in the T&Cās that you will know.
@Donaldo_Duckarelli Good point. I missed that. Presumably the percentage reported will be identical for all clients who hold MSFT shares.
If my shares are lent does this in any way affect my ability to sell them when I wish?
If people holding shares can have their shares lent out from under them doesnāt this prevent short squeezes? Can someone tell me why this isnāt just another case of the big guys changing the rules to benefit themselves and screw retail investors?
Stock lending has been around for a long time.
This does not impact your ability to sell the shares.
I believe that the matter was already covered - thanks for the input to all!
@Sasha Some of the information in your video is inaccurate - see @Dougal1984 answers for reference:
Off-topic, however, back in the days, a similar misunderstanding happened with another video review of yours, and again Iād like to suggest you to reach us anytime whenever a doubt arises - that way weāll avoid any potential confusion of the audience 
@Dougal1984 Iām looking at it as we speak - Iāll keep you posted.
@NickLeeson the share lending was introduced more than a year ago. With the latest document amendments, we were aiming to make our wording more transparent.
Feel free to ping me if any questions arise.
Some good points, well made. Iām glad youāve put them to T212 because an opportunity to reply should lead to better informed videos which are more balanced and accurate.
I think what irked a few people is the misleading, clickbaity āT212 just killed dividend investingā title ā a claim which appears to be based on a incorrect reading of tax rules.
Sorry to jump in, but below comment is relevant to your statement ājust pointing outā:
No offense, just sharing my view
The irony of Sasha complaining that 212s Comms arenāt good enough when heās released a number of factually incorrect, tinpot conspiracy videos on a number of companies (not just 212) is not lost on me.
I would like some clarification of how US withholding tax applies to āsubstitute dividendsā = āmanufactured dividendsā on stock that is lent out. I forsee the problem of cascading tax. Bear with me. I promise this is interesting.
Suppose I own 1000 APPL. These are lent to a short-seller H1, who proceeds to sell them to investor B, who is, like me, is a UK resident subject to US 15% withholding tax. At the dividend payment date, B receives $0.22 per share, less the 15% withholding of $0.033 per share. So US government collects withholding tax of $33 from B.
But then I am simultaneously paid a $220 āmanufactured dividendā, or āreturn of capitalā, presumably with 15% withholding also deducted. Does this mean that the US government (or the sort-seller) profits by a second $33 from the one dividend?
Imagine if B loans to another short-seller, H2, who sells the stock to investor C, and so on. Does each of B, C, D, etc see their dividend payment reduced by $33?
Clearly, this cascading behaviour of multiple $33 deductions does not make sense. There must exist some protection against withholding tax being deducted multiple times in respect of dividends on a single block of 1000 shares. So what really happens. If my stock is loaned?
Will I receive from person who has borrowed stock the full $220 ($0.22 per share) without any withholding tax deduction? Will it be called āreturn of capitalā. If that is the case, I may actually benefit/lose, seeing as I pay 20% tax on capital gains, but a different rate of 0%/7.5%/32.5%/38.1% on dividends. Tax will depend on my cost basis. If my AAPL shares are already pregnant of 90% capital gains, then a return of capital of $220 could land me with a capital gains tax bill of .90x(220)x(.20) = 39.60.
Or maybe the person to whom the stock is loaned only pays me $187 = 220-33 and therefore he (not the IRS) benefits from the fact that he does not need to pay me the full $220? But that is a problem for me because then I cannot say to HMRC that I have already paid $33 tax to the IRS and take it as a deduction against my UK dividend tax bill. In this case the problem of multiple $33 deductions against the same dividend will occur. Who benefits from the multiple $33s paid by those in the chain of shareholders (by me, B, C, ā¦ )? Is it the stock borrowers (H1, H2, ā¦), broker (IBKR or T212), or the IRS?
Could @Tony.V or others please explain a bit more about what is the precise nature of payments that are made in lieu of dividends on stock lent out. My guess is that the answer is 1. above, that no withholding tax is taken from return of capital paid in lieu of stock dividends. I have not yet had any dividend like that so cannot tell from my own history.
Edit. Based on answer below it seems I can expect to receive the full $220 with no US withholding tax deducted. It will not be called return of capital. I will declare it for UK dividend tax along with all my other dividends that have not been subject to withholding tax.
This post is now been edited because of answer below.
It seems that A and B will be paid the full $220, without any withholding tax deduction.
Suppose A, B, C are UK investors going long. H1 and H2 are hedge funds selling short.
A ā H1 => B ā H2 => C
ā means āloan stockā
=> means āsell stockā
IRS collects $33 withholding tax from C
H1 and H2 payout $220 to each of A and B
IRS nets ($33 from C) - (tax on H1+H2 trading profits, reduced by their costs of $220+$220)
HMRC collects dividend tax on the full $220 from A and B, and a lesser amount from C.
Itās no coincidence they stopped you from placing sell limits that are far away from current selling price - this is to prevent you from disabling share borrowing. 
From what I read elsewhere it is untrue that placing a high sell order could disable your shares from being loaned. In fact,
āthere are plenty of contractors and promoters working the chat rooms and forums telling people falsely that if they set high limit orders they will protect their positions. But actually, they are misleading them in order to scope their possible exits for the reasons previously mentioned and put selling pressure on the order book.ā
Read here: Securities Lending - #2 by chantal
Q. If you open a limit sell order with a price much higher than the current bid/ask prices, will your shares be lended? Or does this prevent your shares to be available for lending?
A. Theyāll still be eligible for lending.
If you find something different in the T&Cs please quote the reference.
Seems I misread this part
22.11. We have systems and controls in place to ensure that only shares belonging to clients who have given prior express consent can be used for share lending. If You no longer want to participate in Share Lending You will have to terminate this Agreement or have a Sell-only Limitation placed on your account and close all of your current positions. Any positions left open would still be eligible for Share Lending.
So T212 are saying, we are gonna lend your shares and take your voting rights, we will also profit from this and you canāt stop us other than by not using T212 service.
I really hope other brokers wake up and start offering fee free apps, they will easily take T212 marketshare.
And you think that other brokers donāt lend their customers shares? 
(Some are more transparent and communicate openly about it, but others are more opaque.)
Especially as many Fintechs brokers use third-party broker-dealers to get access to the markets or fraction the shares or to have other B2B financial services related to trading.
Vanguard and Blackrock do the same thing when people buy their market tracker ETFs. That hasnāt stopped their popularity. The fees earned from share lending help to offset other costs.
Vanguard and Blackrock manage over $12 trillion in assets collectively, I donāt see many people belly aching about them either. If low cost investing is the priority, then there are sacrifices that are made.
I donāt believe that HL lend shares. But with that in mind, it may be worth comparing the fees to the above and T212, with HL to gauge what you value more as an individual investor?
Finally, would I like my shares not to be lent, and the ability vote? Absolutely.
Do I want to pay for the privilege? Absolutely not, as my current capital is simply not worth it. In future, who knows?
There are multiple finance professionals on this forum, could make an interesting thread if asked and the feedback may be of use to benefit everyone. Thatās the advantage of this forum that is overlooked at times. To have open discussions and make suggestions to improve things for all. Itās then up to 212 to listen and focus on those of most interest as end of day every change has a price.
Hello @Richard.W,
Regarding any Payment in Lieu received by our intermediary, we distribute the amount resulting from such payment in gross. We donāt withhold a tax to the Payment in Lieu proceeds. Return of Capital payment has nothing to do with the Payment in Lieu distribution.
@Sasha Weāve experienced some technical discrepancies with the visualization of the correct type of dividend. However, weāve corrected many of the wrongly displayed types & weāre still working on solving it in general. Nevertheless, we donāt treat Payment in Lieu as Return of Capital nor our intermediary.