Tax on ETFs domiciled in Ireland

Help 👋
1

Hi,

I’ve seen that a lot of the Exchange traded funds are domiciled in Ireland. If investing from the UK, would dividends from these funds be subject to a withholding tax?

For dividends not to be subject to this tax, do I need to make a non-resident declaration to the fund? Is there a way to do this through the free trade app?

Does anyone know of any other tax-implications that could arise for UK resident UK investors from investing in Ireland domiciled funds?

Many thanks!

2

Withholding tax is on American investment. Nothing you need to do for Irish domiciled ones

3

Possibly, but you can claim a UK tax credit for some if not all of the Irish withholding tax paid.

Not unless you are a non-dom.

4

Hi @willmkz

Just to expand a bit on what has already been said…Whilst Irish ETF’s are except from withholding tax, it’s worth noting that dividends arising from Irish equities are subject to a 20% deduction.

Many Irish companies with subsidiary’s in the UK offer something called an “Income Access Share Arrangement” which allows UK resident shareholders to receive income sourced from the UK and therefore are not subject to a deduction of 20%. :smile:

Where this is possible, we will automatically apply for the UK sourced income :wink:

6 Likes
5

Thanks very much to all for the advice.

@JamieP , thank you for explaining this in more detail. Do the vanguard s&p 500 etf and vanguard U.K. gilts etfs on Freetrade offer the “income access share agreement”? Also, is there an Easy way to spot if an investment has this before buying (for example in the KIDD or on the company website)?

Many thanks,

Will

1 Like
6

Hi @willmkz,

There’s no need for Income Access Share Arrangements for the Vanguard S&P 500 or UK Gilts as these are ETFs and already except from the 20% tax.

It’s only the Irish equities or bonds that are subject to the tax, for example CRH or Experian. This information, along with whether they offer IASA should be made available on the company’s website.

2 Likes
7

Hi,

Thanks for all the help guys, but I’m still worried that this way of investing has tax implications and I understand what I meant better now.

Does the Vanguard ETF holding S&P 500 shares and domiciled in Ireland have to pay a 15% withholding tax to the US government on dividends on its underlying assets? I understand this would be passed straight onto the UK investor and cannot be reclaimed, is that correct?

Thanks in advance for any advice,

Will