Newbie question re the W-8BEN form

First Time Investing šŸ£
1

Hey all

Sorry if this has been discussed already (I couldnā€™t find it) but can anyone explain to me the whole W-8BEN form situation and what itā€™s for in simple terms.

Are there any risks to submitting it for a UK resident like myself in terms of tax stuff and itā€™s not anything that can affect me when I travel to the US at all is there?

Sorry if this sounds stupid, but Freetrade makes it seem like a really simple easy to fill out form (fair play to them!) but ii, for example, make it seem like a really intense form with technical jargon added in.

Any help would be appreciated!

Cheers,
Stu

2

In simple terms, it is to confirm that you are not a US person (whether a company or an individual), which entitles you to a reduced withholding tax on US source dividends, i.e. they deduct 15% instead of 30% if you were to reside in the USA.

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3

Nope. The form is to confirm that you are a foreign person and the beneficial owner of the securities. It is also the way to claim a reduction in the 30% withholding tax that is charged to all non-US persons, depending on the applicable bilateral tax treaty, which is the case for the UK. If you are a US person you donā€™t need the form and you are not subject to any withholding tax.

4

Honestly, itā€™s harmless. In fact, itā€™s in your interest to fill it out as itā€™s our ā€˜special relationshipā€™ deal with the US.

Itā€™s why a lot of us donā€™t buy European stocks like Heineken, Nestle or Novartis AG, because weā€™d pay 30% on our dividends from countries that donā€™t have that arrangment with us.

W8-BEN forms are quite normal. In my side hustle, I sell some photo/video library stock footage for a news agency, and get paid in US dollars, so i have to fill out a W8-BEN for that.

Itā€™s fine. go ahead and fill the form and get yourself some tasty US stocks.

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5

Thanks all! Much clearer now :+1:t3:

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6

American govt. taking their slice of the pie :pie:

7

Hi Viktor,

Iā€™m filling in my W-8BEN form for US stocks but pay British tax and Iā€™m not sure what to put on part 2 of the form on point 10, where itā€™s asking for Special rates and conditions?.

Thanks,
Smickey

8

Iā€™m not sure why youā€™d resurrect a 5-year-old topic to ask the COO of Freetrade about how to fill in your W-8BEN form. Did you not try to search the forum?

Mods, can we split out please?