UK tax on US dividend - cannot get full tax credit

Cannot get full UK tax relief for foreign withholding tax

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I am helping a UK resident widow who receives US dividends.  There is 'US Federal backup withholding tax' @ 24% and 'Irish withholding tax@ @ 20%, so a total of 44%,  It seems only possible to get UK tax credit @ 15%, so she is ending up paying UK tax as well!  How does she recoup/get UK tax relief for the US and Irish tax? Many thanks.

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By Tim Vane
24th Jul 2019 00:07

She needs to contact the Irish/US tax authorities and request a refund of the overpaid tax. She can’t get tax relief from the UK for tax she overpaid in another country.

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By David Treitel
13th Aug 2019 11:16

It sounds as if these are Irish securities held in a US brokerage account and the client has overlooked providing the broker with a W-8BEN.

Aside from the current year, 2019, US withholding the only method of getting a US refund for years before 2019 will be for the widow to apply for an ITIN and file a US income tax return. As the first IRS ITIN Certifying Acceptance Agent in the UK back in the year 2000, I have helped many thousands of people since successfully apply for or renew ITINS. Our firm currently has a 100% success rate. Given that the IRS reject over 30% of all ITIN applications, this is a record of which we are especially proud.

David Treitel | Managing Director | American Tax Returns Ltd
The Old Exchange, 12 Compton Road, London, SW19 7QD

Tel: 020 3542 6330

Email: [email protected]

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