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Dividend tax on ISA account


HarryP

Question

Hello folks so i have an ISA account with IG for my dividends investment and it is my only shares account.

But for all my Dividend gains a tax amount was cut by IG. Note worthy at this point i did not make more than 2000£ worth of gains from dividends which is the Tax free allowance and i still have 15 000£ leftover from my ISA tax exemption. When i called IG they told me that only real estate dividends fall within the tax-free category.

Note thats not mentioned anywhere in the government website, https://www.gov.uk/tax-on-dividends.

Should i be taxed as they said as my dividends are not real-estate related or was this a mistake on their part?

Thanks for any help!

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3 answers to this question

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9 hours ago, HarryP said:

Got my answer from Reddit, but apparently what i missed and the IG people failed to mentioned was the Withholding Tax, Since my stock investments where in the US there was still a 30% Tax on the US side for all Dividends.

 

1 hour ago, gezmond said:

Most (if not all ) investment platforms get you to fill in a W8 (W-8BEN) form before they let you buy US shares , do you remember filling one in? this reduces the divi withholding tax from 30% to 15% . The tax free allowance for divis you mentioned doesn't apply in an ISA, if you had a huge account with divis of a million you wouldn't pay any tax to inland revenue....in fact you don't even have to record ISA income on a tax return

Hi @HarryP, @gezmond,

When you trade US shares you should have a pop up  window prompting you to complete the W8-BEN form.
If not you can find the form here:
https://www.ig.com/uk/us-stocks

Further information on:
https://www.ig.com/uk/help-and-support/investments/share-dealing-and-isas/what-is-a-w8ben-form-and-why-do-i-need-one

If your form is expired, you can complete the form on My IG > Settings > Dealing US stocks:
image.png

I hope that it helps - Arvin

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Got my answer from Reddit, but apparently what i missed and the IG people failed to mentioned was the Withholding Tax, Since my stock investments where in the US there was still a 30% Tax on the US side for all Dividends.

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  • 0

Most (if not all ) investment platforms get you to fill in a W8 (W-8BEN) form before they let you buy US shares , do you remember filling one in? this reduces the divi withholding tax from 30% to 15% . The tax free allowance for divis you mentioned doesn't apply in an ISA, if you had a huge account with divis of a million you wouldn't pay any tax to inland revenue....in fact you don't even have to record ISA income on a tax return

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