Hi all, trying to find out if T212 recovers the 20% witholding tax suffered by the likes of Property reits, when you hold the stocks inside an ISA. Freetrade used to periodically recover this for investors and pay it over. Canāt seem to see the same with T212. It is this sort of tax on income and dividends that stopped me buying divi stoaks in the USA.
Hi
I asked this when I first joined as I had switched from Freetrade and was scarred by their terrible way of doing this. As far as I know on T212, they simply pay the amount without deducting the 20% tax.
Ah right, i guess if its in an ISA then that might be the right way. Still suspicious that we receive 20% less than we should.
Ah, Iāve never noticed that, Iāve always factored in a 15% withholding tax with all US stocks, unfortuantely thatās still payable even within an ISA. Iāll have a look out for it next time I get a US REIT payment.
My problem is UK Reits. Got used to Freetrade making a big show of reclaiming tax on several stocks or funds, usually a couple of months after divi paid. Bit surprised no mention on T212.
Ok, as far as I know, UK REITs are paid in full. Hence why no mention I suspect, but Iāll look out next time to check the exact amount of payment.
Just had this reply from T212 -
At this time it is not in our service to recover applied withholding taxes.
So anyone with a REIT is losing 20% of their income, compared to holding them in say Freetrade. This could be a dealbreaker. Going to do sums, but this could cost.me Ā£200 over a year.
Thatās interesting, according to this post from 2023, T212 stated that they pay PIDās at 100% gross with no deduction of WHT
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I mean thereās one way to ultimately check, and that is to look at a dividend receipt on a REIT in an ISA. What you said was my understanding anyway but perhaps OP has seen different on calculating dividends in their account?
V interesting. I do have my doubts about the competence of individuals on T212 Live Chat, as getting nonsense on Isa transfers and allowances. Before i pull my Isa investments, i will carefully review the next distribution. Have checked and seems i have 5 Reits and would be losing nearly Ā£200, so worth paying Freetrades Ā£60 fee if they recover it and T212 arent bothered.
Yes, it was me who asked that question in that thread because of my Freetrade experience. Iāll have a look next time I get one but would probably be a deal breaker for me if it wasnāt recovered.
Excellent, thank you. Looks like it is as I thought then.
Sounds promising, and looking forward to testing when income pops up. I rest my case re T212 advisors,who are basically saying, go seek out a tax advisor to recover the withholding tax. More sense from community.
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Iām fairly sure folk were joking on here / reddit about FreeTrade making a big deal about how amazing it was for customers that they are doing something they should be doing by default.
FreeTrade has its uses, they have access to say more segments of AIM, but what they claim is their USP and what their USP is are very different things.
Also this question is quite niche. I wouldnāt expect any broker employee to answer easily.
I would be careful buying REITs here too depending on liquidity, thatās where 212ās downfall is for users on lower liquidity stocks, sometimes itās worth paying the Ā£10 on say HL. A friend paid 22.7p a share for a stock and 24p on here due to low liquidity on the exchange. Ā£200 worth of shares here would get 833.33 units. On HL using a market maker and paying Ā£10 you would get 837 shares.
With HL does it have more liquidity because the orders are going direct to market whereas T212 try to fill them among customers?
HL give you access to both trading āon marketā and with āmarket makersā so the liquidity is higher. Market makers generally work with bigger orders to execute buys and sells and take commission for doing so. Sometimes that can work in your favour: