Withholding Tax at 15% on US stocks

Sorry about the dumb question.

I have just realised my dividends had a 15% tax withheld even inside ISA wrapper on US stock.

Does that mean the buying and selling of stocks also incurs this 15% tax.

Maybe I am not understanding this properly, does that mean the gains on the portfolio has to be 15% or more to get anything meaningful out?

Sorry. It’s a very basic question. Thanks.

The US taxman doesn’t care about UK tax-free wrappers, so unfortunately you pay 15% on US shares dividends, but I believe that’s where it ends, i.e. no CGT.


also, i believe it should be 30% but half for UK investors. I may be wrong but sure I read that around here.

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Yes, the tax on dividends is 30% but a treaty between the US and UK reduced it to 15%. You have to fill out the US tax form W8-BEN to be verified that you qualify for that reduction.


It’s 15% of the paid amount…

There is no tax payable on UK dividends within an ISA


In an ISA, the 15% american withholding tax is deducted from your dividend payout before it’s paid and there’s no avoiding it. That’s as low as you can get in an ISA.

However, in a SIPP it can be 0% percent if your broker is a Qualified Intermediary with the IRS. Old school brokers like Hargreaves Lansdown and AJ Bell are 0% but Freetrade (or should it be Gaudi) is 15%.

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