International taxes question

[beermoneytrader]

Apologies if something similar has been asked a gazillion times. I realise that some of it is covered by this great post, but I just wanted to be totally clear about the international element.

Let’s say Samantha has accounts with 4 brokerages. She’s based in the UK and invests within the allowance for her S&S ISA, plus some money in GIAs via three other brokers. She really wanted to invest in a variety of shares that aren’t commonly traded, hence the multiple brokers. As I learned from this, it doesn’t seem to matter where the company is based that you invest in, but where you pay your taxes.

For the sake of this example, let’s say Samantha makes a £100,000 profit on what she puts into her S&S ISA, plus £100,000 from each of her investments in those other brokers. She’s only invested in shares.

To make this simple, let’s say that 100% of the ISA profits come entirely from UK-listed companies and 50% from US-listed companies. With each of the other three firms, she’s respectively profited from 100% of the shares being in German, US and Hong Kong listed companies.

I believe there’s a 15% tax the US government levies if you profit from shares in a US-listed company. Assuming the W-8BEN form is filled out. In that case, would Samantha pay 10% in capital gains tax on her £100,000 to the UK government on the shares outside of the ISA, plus that 15% to the US government? Is there additional taxation on profit made for UK residents on companies listed in Europe or Asia?

Apologies if this is a little convoluted. My assumption is that there’s 15% tax due to the US government on the ISA profits.

[Vlad (Vladislav Kozub)]

Assuming Samantha is UK resident only

@beermoneytrader

£100,000 profit on what she puts into her S&S ISA

Assuming you mean capital gain (i.e. bought at £100k, sold at £200k) - all is exempt from tax

@beermoneytrader

plus £100,000 from each of her investments in those other brokers

All is chargeable to UK capital gains tax

@beermoneytrader

let’s say that 100% of the ISA profits come entirely from UK-listed companies and 50% from US-listed companies

Irrelevant

@beermoneytrader

With each of the other three firms, she’s respectively profited from 100% of the shares being in German, US and Hong Kong listed companies

Also irrelevant, all is chargeable to UK tax

@beermoneytrader

I believe there’s a 15% tax the US government levies if you profit from shares in a US-listed company.

This is on US dividends, not gains. There is no withholding tax on capital gains

@beermoneytrader

In that case, would Samantha pay 10% in capital gains tax on her £100,000 to the UK government on the shares outside of the ISA

Assuming her income is £0, the first £37,500 gain is taxed at 10% and the excess at 20%. If she has income over £50,000 per annum, all gain is charged at 20%

@beermoneytrader

plus that 15% to the US government?

This is incorrect, all is charged to UK tax, nothing for the IRS

@beermoneytrader

Is there additional taxation on profit made for UK residents on companies listed in Europe or Asia?

Zero

@beermoneytrader

My assumption is that there’s 15% tax due to the US government on the ISA profits

There is not.

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