Does IG automatically deduct or withheld tax to American government when I'm selling US Shares?

[Mimi]

Hi, 

I am preparing for tax return in Australia for FY2022-2023. I use IG platform to trade US shares. I would like to know if IG would automatically deduct or withheld tax and pay that to US government when I sell my shares? If it does, where can I see the tax that had been paid to US government?

Kind regards,

[KoketsoIG]

Hi @Mimi,

Thank you for contacting us.

Please note that withholding tax is deducted from the dividends that you receive on US equities. The dividend amount that gets credited to your IG account is already accounted for withholding tax.

The withholding tax that is deducted from your dividends in US equities is the one that gets passed onto the Internal Revenue Services (IRS).

You can see tax paid on US dividends on your income summary statement.

Kindly request the income summary statement for share trading accounts from helpdesk.au@ig.com

All the best,

-KoketsoIG

 

[Mimi]

On 10/08/2023 at 19:38, KoketsoIG said:

Hi @Mimi,

Thank you for contacting us.

Please note that withholding tax is deducted from the dividends that you receive on US equities. The dividend amount that gets credited to your IG account is already accounted for withholding tax.

The withholding tax that is deducted from your dividends in US equities is the one that gets passed onto the Internal Revenue Services (IRS).

You can see tax paid on US dividends on your income summary statement.

Kindly request the income summary statement for share trading accounts from helpdesk.au@ig.com

All the best,

-KoketsoIG

 

Thanks for your reply. The tax regarding dividends and equities are fair enough.

Just want to confirm, does IG withheld any tax from each trading (sell) and pay it to IRS? 

[KoketsoIG]

On 13/08/2023 at 12:26, Mimi said:

Thanks for your reply. The tax regarding dividends and equities are fair enough.

Just want to confirm, does IG withheld any tax from each trading (sell) and pay it to IRS? 

Hi @Mimi,

Thank you for your response.

Please note that when selling US equities, there is a 0.00229% US on exchange fee that applies. This charge appears on your transactions history (statements) as " Section 31 fee" and is not included in the income summary for tax reporting.

With regards to withholding this rate on the sale of shares on behalf of the IRS, I will provide an update when I have received feedback from our tax team.

Apologies for the delayed response and I appreciate your patience in this regards.

Talk to you soon,

KoketsoIG

[KoketsoIG]

On 14/08/2023 at 15:51, KoketsoIG said:

Hi @Mimi,

Thank you for your response.

Please note that when selling US equities, there is a 0.00229% US on exchange fee that applies. This charge appears on your transactions history (statements) as " Section 31 fee" and is not included in the income summary for tax reporting.

With regards to withholding this rate on the sale of shares on behalf of the IRS, I will provide an update when I have received feedback from our tax team.

Apologies for the delayed response and I appreciate your patience in this regards.

Talk to you soon,

KoketsoIG

Hi @Mimi,

Thank you so much for your patience in this regards, I have now consulted with all the relevant teams. The fee applied on the sale of US equities is the SEC fees (Section 31 fee) as mentioned previously. Please note that this fee only appears in the transactions history and not income summary as the income summary only shows dividends received and the withholding tax applied.

All the best,

-KoketsoIG