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Spread Betting on US stocks


Victorus

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On 14/06/2022 at 17:45, Victorus said:

If I do spreadbetting on US Stocks, do I have to pay tax? (e.g. US)

Hi @Victorus

The IRS issued regulations under Section 871(m) to ensure that non-US holders of US equity derivatives – including spread betting and CFDs – are taxed on dividend income in the same way as non-US holders of the underlying equities. The new regulations achieve that by deeming 'dividend-equivalent payments' arising on derivatives over US equities to be US-source dividend income.

Generally, an individual is subject to 30% withholding tax under US rules. However, certain tax treaties that exist between the US and other countries may entitle you, where eligible, to a reduced rate of withholding tax. For example, an eligible resident of the UK is subject to 15% rather than 30% withholding. This means a UK tax resident can receive a net payment equal to 85% of the dividend-equivalent payment, as opposed to 70%.

For more information please kindly visit this link: US withholding tax on derivatives - 871 (m)

 

All the best - MongiIG

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