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Watch out for withholding tax on your dividends

What on Earth’s withholding tax? Why has no one told me about it before? WTF? These and other questions beginning with W bounced around my mind when I first discovered this mysterious cost of investing abroad.

The number of parties tapping your investments for a percentage is unending, up to and including shadowy foreign agencies (aka tax authorities).

Withholding tax is paid on income you’ve earned overseas. For investors in shares, equity funds, and ETFs, it can have an outsized impact on your dividend income, because it’s highly likely that you’re paying more tax than you should.

The amount taken varies:

  • The United States takes 30%
  • Switzerland relieves you of 35%
  • France deducts anywhere from 12.8% to 25%

It gets worse. Once you’ve got that dividend income back to the UK, Her Majesty’s Revenue & Customs (HMRC) wants another piece of it to the tune of your UK dividend tax rate.

Even the taxman can see this double-tax whammy is unfair. But it’s up to you to do something about it, and that means understanding the system…

Don't let America take 30%

Claim back withholding tax

The US should only take 15% off your gross dividends, not 30%. That’s according to the Double Taxation Agreement (DTA) in force between the UK and Uncle Sam.

The UK has similar agreements with many other countries around the world, which theoretically reduce the amount of withholding tax UK investors pay to foreign powers.

I say theoretically, because you have to actively claim your 15% back from the US Internal Revenue Service (IRS). They don’t just hand it back with their compliments. Quelle surprise. The same goes for any other country that deducts withholding tax at a higher rate than agreed in the DTA. In most cases you shouldn’t be paying over 15%.

To reclaim or stop the deduction at source, you must fill in a tax form. Which form, how torturous it is, whom you send it to, and how often depends on the country you invest in. 

For the US, it’s a W-8BEN form. 

It’s basically a Kafka-esque labyrinth and the best advice is to find a broker who will handle the paperwork for you.

Get foreign tax credit relief

You can reduce the impact of withholding tax further by offsetting it against UK tax due on your foreign dividends.1

HMRC state in their foreign tax guidance:

You’ll get relief on the lower of:

• the foreign tax payable under the terms of the [double tax] agreement
• the amount of UK tax due

So in the case of US dividends, you can offset the 15% withholding tax you’ve already paid over there against the UK tax due:

  • Basic-rate taxpayers – 8.25%, which won’t cover all your withholding tax liability.2
  • Higher-rate taxpayers – liable for 33.75%/39.35% can offset the entire 15%.

You offset foreign withholding tax against UK tax by filling in a self-assessment tax return.

Two routes are open to you at this stage, one of which is far better than the other:

  1. Deduction
  2. Foreign tax credit relief

Whatever you do, choose foreign tax credit relief. Relief offsets your entire withholding tax payment against your UK tax liability.

Deduction only reduces the amount of taxable income. It’s far less cost-effective, although it may be the only option available in a few cases.

If your investments are shielded from UK tax by an ISA/SIPP then there’s no need to claim the foreign tax credit relief.

Beware that ISAs don’t protect you from withholding tax. The IRS and their ilk don’t give two hoots for subtleties like that.

Avoid the whole palaver

SIPPs qualify for a zero rate of withholding tax from certain countries including the US.

However, not all brokers structure their SIPPs to enjoy this freebie so check with your broker first if the extra 15% off is a deal-breaker.

ETF and fund investors can also duck withholding tax on their dividends by investing in the right funds.

Funds/ETFs domiciled in Ireland and Luxembourg do not levy withholding tax on dividends paid to UK investors. You only pay regular UK rates of tax, or nothing at all if your investment is tucked away in an ISA or SIPP.

Most of the market-leading trackers available to UK passive investors are based in Ireland, Luxembourg or the UK. Watch out for the occasional ETF based in France or another more taxing territory. 

Any index tracker worth its salt will tell you where it’s domiciled on its webpage or factsheet. 

Say no to withholding tax

Interrogate your dividend statements to find out if you’ve paid too much withholding tax. You can find out the rate you should have paid by checking an individual country’s DTA with the UK.

  • If you’ve overpaid, then get your broker onto the refund case.
  • If you’re thinking of diversifying into foreign shares or funds, then check the withholding tax rate that applies.
  • Choose a broker who will handle the recovery paperwork for you or offers a SIPP that pays US dividends gross of tax.
  • Plump for UCITS funds domiciled in countries that don’t charge withholding tax.
  • ISAs and fund reporting status are no defense against withholding tax.

That ends another broadcast against the evils of hidden costs.

Take it steady,

The Accumulator

  1. This only applies to countries that have a Double Tax Agreement with the UK. Even then, there are a few exceptions. []
  2. Doesn’t apply to all countries, or to funds 60% invested in interest-bearing assets. Claim foreign tax credit relief to cover the few exceptions. []
{ 44 comments… add one }
  • 1 RetirementInvestingToday November 25, 2010, 8:06 pm

    Hi TA

    Thanks for highlighting the witholding tax issue. I also picked up on this in the post http://retirementinvestingtoday.blogspot.com/2010/04/minimising-investment-portfolio-fees.html where I was discussing that you need to be careful to minimise both “fees and taxes” rather than “fees or taxes” in your portfolio if you are to maximise potential returns. Ie it’s the cumulative affect not one or the other.

    I was faced with this exact dilemna when picking my emerging markets ETF where iShares, Lyxor and db x-trackers seemed the obvious choices. I went with db x-trackers.


    disclosure: My retirement investing low charge portfolio contains db x-trackers XMEM.
    .-= RetirementInvestingToday on: It must be nearly bonus time and the S&ampP 500 cyclically adjusted PE PE10 or CAPE – November 2010 Update =-.

  • 2 ermine November 25, 2010, 8:27 pm

    Now I understand why Ishares etfs are domiciled in Ireland, though what with the current hoo-hah going on there wonder hw long that little loophole will remain…
    .-= ermine on: what are all you moaning minnies on about- you’ve never had it so good =-.

  • 3 The Investor November 26, 2010, 9:23 am

    @ermine – Yes, and at least one of the Irish banks has assumed some counterparty risk for iShares (I think the “Governor of the bank of Ireland” or whatever it’s called). Doesn’t seem to be causing an issue among those more informed, though.

  • 4 The Accumulator November 26, 2010, 11:09 am

    I don’t think it’s a loophole, I think it’s a deliberate act of policy. I’d be surprised if they changed tack for the same reason they’re determined not to jack up corporation tax. Long term salvation relies on attracting overseas business investment.

    iShares only have a few synthetic ETFs at this stage. I’d be surprised if they were solely relying on the Bank of Ireland and if it’s a UCITS ETF then 90% of the fund’s assets will be held as collateral.

  • 5 Moneyman July 3, 2011, 10:21 pm

    …or just invest in the LSE – isn’t there enough choice?

  • 6 The Investor July 4, 2011, 10:55 pm

    I’m inclined to agree for most investors Moneyman, but some do stray into overseas-listed ETFs by accident.

    If you buy shares directly it’s a different kettle of fish — some kinds of stocks just don’t really trade in London, notably technology stocks and a wide choice of titanic global consumer brand names.

  • 7 Mike January 7, 2012, 2:02 am

    It’s not quite right that no withholding tax is paid on distributions of db x-trackers or iShares ETFs.

    For instance, if you want to invest in US shares, the S&P 500, say, the products by db and iShares that are based in Luxemburg or Ireland track the “Net Total Return” version of the S&P 500–that is, they reflect “the effects of dividend reinvestment after the deduction of withholding tax”. So you pay withholding tax on your dividends, if you invest on those ETFs.

    As far as I’m aware there is no way to avoid withholding tax on ETFs that hold US shares available to investors in the UK (or the rest of the EU for that matter). I haven’t seen any ETFs that accumulate and that track the “Total Return” version of the S&P…

    If anybody comes up with an idea to avoid the withholding tax, please post it here!

  • 8 The Accumulator January 7, 2012, 12:16 pm

    @ Mike – yes, withholding tax is paid on the assets contained within funds that hold overseas securities. But if you hold assets in an Irish or Luxembourgian fund they won’t levy withholding tax on the distributions you take back to the UK. So for a US domiciled fund investing in the US, you’re right it makes no practical difference. Except that withholding tax is taken care of by the fund managers, although that may not be so great if you want to off-set that 15% against your UK tax liability. It’s also worth questioning what that net return of the S&P is after withholding tax. Are they deducting 30% or 15%?
    But if I was invested in a US domiciled emerging markets fund then withholding tax would be levied on the underlying assets and then again by the US authorities on the distributions paid out to me in the UK. So you need to check if your foreign-based fund is domestic relative to its domicile, if it’s not then that’s where the Irish/Luxembourgian play is useful.

  • 9 Nick March 25, 2012, 4:41 pm

    Relative newbie here so I may be talking rubbish, but any assistance would be appreciated. After reading this article and much more research on the site and others, I think I have the following two directions I can take my portfolio in:

    1. Ireland/Luxembourg-domiciled ETFs (iShares/db) where the advantage is no withholding tax on dividends, but the disadvantage is relatively high TER (0.35-0.40%). And also I guess, less currency risk as they are GBP

    2. US-domiciled ETFs (Vanguard) where you get a 15% withholding tax, however you do get the advantage of their much lower TER (0.05%). Also there is the USD currency risk.

    Is this an adequate summary of these two options? Are there any subtleties I haven’t catered for? How do I even begin to compare these options? Thanks a lot!

  • 10 The Accumulator March 25, 2012, 6:58 pm

    Hi Nick,

    You’re on the right lines… but I would add:

    The currency risk may be a moot point depending on the ETFs you choose. The base currency of many ETFs that quote returns in GBP is actually dollars. For example, you won’t find an emerging market ETF that isn’t $ based even though there may appear to be a GBP version. So you’re exposed to currency risk as surely as if the ETF reported in $.

    You’ll pay 15% withholding tax assuming you get the paperwork taken care of correctly, otherwise it’s 30%.

    You’ll need a US broker to invest in the US. I have no personal experience of these, so don’t know if they’ll be able to cater for ISAs and SIPPs.

    You’ll get a greater choice of ETFs in the US and bid-offer spreads will probably be lower.

    Remember to compare dealing fees too. Bearing in mind the US fees will likely be lower (indeed free with some brokers) but subject to currency fluctuation – apart from those free ones.

    Don’t know what US broker admin fees are like, though I suspect highly competitive.

    There’s also differences in compensation schemes to consider in the event of broker bankruptcy or fraud.

    There may be other factors to consider, I don’t have a US-based account, though intend to research this further – one day.

    So there’s a lot to think about…

  • 11 Bence June 12, 2012, 6:34 pm

    Is it worth diversifying internationally, even after withholding taxes and higher transaction costs?

    The investment books only describe the theory, and they use the gross total return indexes. Theory doesn’t take real-world costs and taxes into account.

    But the international ETFs track the net total return indexes, not the gross total return indexes. The net total return indexes are the gross-withholding tax index levels.

    However, your goal as a passive investor is to capture the market return. But the market return is the gross total return, not the net total return.

    So it is worth diversifying internationally, even after you subtract the withholding taxes and the higher transaction costs, and suffer from currency risk?

    Or maybe you should overweight your home country a little in your equity portfolio, but still invest in foreign equities?

  • 12 The Accumulator June 12, 2012, 9:18 pm

    Hi Bence, the amount your fund is paying out in withholding taxes is likely to be less than the amount you pay in stamp duty on a domestic UK fund. I wouldn’t worry too much about currency risk unless you’re approaching retirement as it’s as likely to play for you as against you over the long-term. The point of diversifying internationally is to guard against the chances of your home country flatlining during your investment lifetime. It seems to me that a few extra basis points of costs is worth paying for that kind of insurance as I’m sure any Japanese investor would agree. Lots of people do tilt towards home, and it gets increasingly important to do so, the closer you get to drawing down your portfolio.

  • 13 Bence June 13, 2012, 7:50 pm

    @The Accumulator thanks!

    Do you know why would anyone invest in a distributing ETF? What is the advantage of a distributing ETF over an accumulating ETF? I don’t know any.

    I mean when you hold an ETF in the long term, dealing with the dividends coming from the ETF is a hassle. You cannot even reinvest them immediately, due to high broker commisisons and the bid-ask spread payable to ETF market makers. And there is the dividend tax and the paperwork.

    Do you know why would anyone choose a distributing ETF?

  • 14 The Accumulator June 14, 2012, 7:59 am

    The main advantage is you might be someone actually living on that income and not in the accumulating phase of your investment lifetime. Many ETFs are only available in distributing form and so accumulation is not an option. I have a few like that. I just add the dividend monies on to my next regular purchase. Not necessarily in the same fund. The tax and paperwork are the same regardless of whether your funds accumulate or distribute. If the fund is tucked in an ISA or SIPP there’s nothing to worry about, otherwise you have to account for those dividends anyway. Coupla useful links for ya:


  • 15 rob July 26, 2012, 5:51 pm

    Are there any ways one can reduce WHT on US dividends by interceding a company in a tax friendly/convenient jurisdiction using DTA protection? If so what countries? Can this be applied to investment in other major stock exchanges like the UK, Germany and France?

  • 16 Jacey October 27, 2012, 2:11 pm

    I have discovered that dividends paid to me and my wife since April 2010 from shares in a US company have suffered 30% withholding tax rather than 15% representing an over payment of approx $117 and $332 respectively. Is it possibe to claim a refund retrospectively? Is so is there a special form and where can I get copies and guidance notes? What is the USIR tax year end? Do I have to make separate claims for each tax year? Can a claim be made online? or only by mail, if so what address should I send my calim to?

  • 17 Mark March 27, 2013, 12:04 am

    I’m in a similar position to Jacey, having had the default 30% withheld on dividends over the last few years, and I would like to be able to reclaim at least some of the extra 15% overpayments from the IRS. Can anyone please answer any or all of his questions above? This would really be appreciated, thanks.

  • 18 Susan Jamieson April 2, 2013, 5:52 pm

    Hi – thanks for that – very useful, though I’m still not clear whether Ossiam’s minimum variance etfs are okay or not, as it doesn’t say anywhere on their literature whether they’re reporting/distributor status (or even if they’re UCITS or not, though I gather they are from crawling around on the net). I don’t suppose anyone else can shed any light on the matter?

  • 19 The Accumulator April 2, 2013, 9:11 pm

    Hi Susan, I would contact Ossiam directly for confirmation. It would make me very uncomfortable if that information didn’t come straight from the horse’s mouth.

    Sorry, Jacey and Mark, I don’t know the answer to your specific problem. Have you seen that the article contains a link to the W8-BEN guidance notes? They may contain an answer, clue, or further avenue of enquiry.

  • 20 Kyith July 9, 2013, 12:49 am

    Hi Accumulator,

    I have a rather unique situation. I am a Singapore investor who is looking to do it the passive way. I would like a simple strategy which is to have 1 all world ETF. I take particular interesting in the Vanguard All World ETF because of Vanguard’s low expense ratio. The alternative is to be invested in Vanguard’s Total World Stock Market ETF (VT) in USA.

    VT: The dividends will be taxed 30% withholding tax
    UK Vanguard All World ETF: As far as i know other than REITs UK leverages 0% withholding tax as a Singaporean

    May i know what other things am i not considering? Based on your explanation does that mean in the UK all world there is a implicit 15% dividend withholding tax that i am not seeing?

    If you were me, which approach would you take? I do not need income at the moment and would like to maximise the returns.

    thanks so much

  • 21 David December 10, 2013, 7:25 pm

    Not sure I understand how accumulating funds avoid dividend withholding tax on their underlying investments. Surely the US or any other foreign country applies withholding tax to the dividends as they arise?

    Do accumulating funds offer any advantages to SIPP investors? I am looking at investing in US listed Vanguard ETFs through a company-sponsored Group SIPP because the withholding tax can be reclaimed, but I’m a bit leery of the high fees to buy them through my company’s scheme, so also looking at equivalent UK/Ireland/Luxembourg listed US trackers.

  • 22 The Accumulator December 12, 2013, 6:45 pm

    Hi David,

    Theoretically the divis in the accumulating funds don’t leave the country. Here’s another piece you might find useful on the advantages of US funds over Euro domiciled equivalents:


  • 23 David December 13, 2013, 1:17 am

    @Accumulator – Thanks for the link. The point I was making though is that the US taxes its dividends on the equivalent of the arising basis, so that if a fund’s underlying US investments pay a dividend, it automatically creates a US tax liability for the fund manager, regardless of where the dividend ends up. This is why accumulating funds don’t exist in the US retail market – they offer no advantage under the tax code.

    I could be getting something very wrong though, so feel free to set me straight, and thanks as always for the wealth of information!

  • 24 The Accumulator December 13, 2013, 3:19 pm

    @ David – generally there are no tax advantages for accumulating funds (there aren’t in the UK for example) that’s not why they exist. But having dug into it further I can’t find a straight answer. Only an ever branching maze of complexity. I’ve found specific evidence that German funds levy withholding taxes on accumulating / distributing funds regardless, and I can no longer find the notes that led me to the conclusion that using accumulating funds may be a way to circumvent withholding tax in certain territories – at least in the short term. I’m going to remove this part of the article therefore as I think such loopholes are either blocked or impractical. For example, as a UK resident I’ve found it impossible to find a way to invest in US distributed mutual funds. ETFs yes, but mutual funds no. If anyone has any further insight on this then I’d love to hear it.

  • 25 David December 13, 2013, 4:58 pm

    @Accumulator – you might be right that accumulating funds can help avoid withholding tax in some countries, and it would be interesting to find out which ones! The US is not one of them though.

    US regulations generally forbid retail mutual funds from accepting non-US clients, although I’m not familiar with all the details. But be aware that in the case of Vanguard in the US, each ETF is simply a separate share class of a Vanguard mutual fund. The only difference between the ETF and mutual fund is in how the shares are bought and sold – it’s the same pool of underlying investments.

  • 26 stuart spencer September 20, 2014, 5:38 pm

    What a good thread – which needs refreshed and re-newed to remind people of its importance – as I think I’ve missed the boat.

    I received stock options from my US parent company, I received money in dec 2012 – 6 months prior to that I exercised my options to buy the shares and tax was withheld at source. In theory I think I can now re-claim the tax – but I think there is a 2 year cut off – so I think I’ve missed the boat. Damn it!

  • 27 Naeclue January 20, 2015, 12:19 am

    I just spotted this article and would like to point out that it is not true that SIPPs are no defense against withholding tax. If you hold US listed shares and ETFs in a Hargreaves Lansdown SIPP (and I believe YouInvest) dividends are paid with no withholding tax at all. You do suffer from a rather extortionate 1.7% foreign exchange fee to convert dividends to sterling, but that is worthwhile compared with a 15% withholding tax. It is expensive to trade US securities as well, due to the FX fees, but for buy and hold index investors, the withholding tax savings become worthwhile after a few years.

  • 28 The Investor January 20, 2015, 1:10 am

    @Naeclue — Yes, that’s my understanding too. I understand there is a pension treaty in place between the UK and US (although I suspect I didn’t know this 5 years ago when the article was published!)

    Looks like this article may need an update, but I’ll double check with T.A., as he’s more often right than I am on this sort of small print detail.

  • 29 Naeclue January 20, 2015, 1:22 am

    I am not sure how far the treaty goes back, but I have held a US listed Vanguard ETF (VTI) for 5 years and that has always paid gross.

    There were supposed to be UK listed funds (Tax Transparent Funds) that could be invested in by pension funds to avoid withholding tax, but I have never heard of any of them becoming available to SIPP holders.


  • 30 The Investor January 20, 2015, 8:36 am

    @Naeclue — Yes, I mean I know about the treaty, not that the treaty is an excuse. 🙂 It’ll be our mistake if it’s a mistake. I just don’t want to rush to change before hearing from TA as I’ve been wrongly persuaded on this kind of thing before. Best to have a process. 🙂

  • 31 Naeclue January 20, 2015, 11:10 am

    Very wise.

  • 32 The Accumulator January 20, 2015, 6:42 pm

    Yes, you’re right NaeClue. Thanks for pointing out. The Investor is right we didn’t know this at the time but discovered it since. Will update the piece. The snag with this one is that not every SIPP provider immunises their SIPP against withholding tax, so you need to check.

  • 33 The Investor January 21, 2015, 2:36 pm

    @Naeclue — Just an update to say T.A. concurs this is our boo-boo. We’ll be updating it ASAP, and by this weekend at the latest. (There are some complications in that not all providers implement the WT shield effectively, it seems).

    Thanks for taking the time to share the error with us.

  • 34 paullypips February 27, 2015, 12:40 pm

    I hope someone can help me as I cannot seem to find the answer to this question.
    I hold Fyffes shares via a nominee account (Iweb and previously Motley Fool) that are listed on AIM in London. The distribution of dividends is in GBP although they were originally declared in Euros as FFY is an Irish company in Dublin. I am an ordinary UK taxpayer. Are my dividends paid after deduction of Irish Dividend Withholding Tax? Can I reclaim this tax?

  • 35 paullypips March 2, 2015, 12:00 pm

    I have found the answers to my questions above.
    Yes, I do pay 20% Irish dividend withholding tax (DWT).
    Yes, theoretically I can reclaim it, although it doesn’t look like it’s going to be easy.
    I will try anyway.
    I am now thinking of selling my Fyffes shares as I don’t think I want this hassle with a foreign bureaucracy again.

  • 36 Gurpreet April 23, 2015, 4:34 pm


    I hope someone can help. I live in the UK, however i have company shares from a SAYE scheme. We were acquired and the share were processed via a different broker which did not have my W-8BEN form. Long story short they took a large chunk as Withholding tax.

    I sent in the W-8BEN form and written request to recalculate and refund the Withholding tax. However the agent refuses and i have to wait for the 1042-S form in 2016.

    Is this correct, they cannot adjust their liability? I have to wait for the US tax year to finish before i can claim for a refund?


  • 37 rafa May 1, 2015, 10:21 pm

    Hi everyone,

    I was wondering whether it would be interesting to create a shared & public spreadsheet as a summary of the international WHT picture.

    If The Accumulator / anyone else wants to manage a parallel / private spreadsheet it could minimize errors. Absent of any initiatives, here is one attempt:

    obvi. collaboration is very welcome. thanks everyone

  • 38 The Accumulator May 4, 2015, 1:24 pm

    Hi Rafa,

    A great idea. Thanks very much for sharing your work.

  • 39 Chris August 26, 2015, 3:31 pm

    Hi Accumulator.

    I’m hoping you might be able to clarify my upcoming tax situation as I have struggled to find this information thus far.

    I own shares in a private US company, not listed on any exchange. I am a UK citizen and have always been UK resident. The company is being acquired and I will soon receive payment for all my shares. I have already completed and submitted a W-8BEN form to my withholding agent (the company being acquired).

    How will I be taxed on the sale of these shares? This is not dividends, this is the sale of the equity I own.

    Grateful for any information you can provide.

  • 40 The Accumulator August 26, 2015, 7:49 pm

    Hi Chris, that’s a complicated situation and one I haven’t researched. Would definitely recommend consulting a tax specialist unless the IRS have published anything that makes your situation clear. Sorry I can’t be of any more help than that.

  • 41 Andi January 8, 2016, 8:38 pm

    Does anyone know of a list of platforms that take care of the withholding tax for you? I emailed Interactive Investor to ask if they are a Qualified Intermediary and they said not currently but they are looking in to it and HL also seems to not be able to take care of WHT for you. Do any of the main online brokers do this? TD Direct, iWeb etc? They all seem to mention the W-8BEN form but it’s unclear whether they deal with the IRS for you or not? I don’t really want to have to claim it back after the fact – pipe dream?

  • 42 MJ November 26, 2018, 4:07 pm

    Hi Accumulator,

    I am about to SIPPify with HL. This post was written some time ago; does all the above info still stand, and is there an update on Funds/ETFs (and the companies) domiciled in jurisdictions exempt from withholding taxes?
    I have been a long time reader. Keep up the great work!


  • 43 The Accumulator November 28, 2018, 9:00 pm

    Hi MJ,

    The above is more or less the case but I’m not a tax expert and would need to deep dive back into the detail to be sure it’s all bang up to date. It’s still a good guide to the issues, but more roadmap rather than realtime satnav.

    Useful things I’ve found out since… Luxembourg double-tax treaties are not as good as Ireland’s when it comes to how much withholding tax is paid on the ETF’s underlying assets. So while it’s true that Luxembourg ETFs pay dividends withholding tax free to investors, it’s likely that the dividends paid to the ETF in the first place from US holdings will be less generous than those rolling into Irish counterparts.

    The index provider table in the post is likely to be more complicated these days but you can easily tell where a product is domiciled by reading the country two-letter country code embedded in the product ISIN number. For example:

    IE = Ireland
    GB = Great Britain
    LU = Luxembourg
    FR = France
    US = US
    DE = Germany
    CH = Switzerland
    CA = Canada
    GG = Guernsey
    IM = Isle of Man
    JE = Jersey

  • 44 Jamie April 29, 2019, 7:07 pm

    So in this (probably oversimplified) example …

    I invest in the Vanguard S&P 500 UCITS ETF (VUSA) and hold the investment in an ISA. The fund receives dividends from the companies it invests in, e.g. Microsoft. Vanguard complete the necessary paperwork (W-8BEN or similar) to reduce the withholding tax (as the fund is domiciled in Ireland). The ETF goes on to pay me dividends, but I pay no further withholding tax. Right?

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