# UK REIT Dividend Tax Withholding



## elliottmarcj (4 mo ago)

Hi all,

I'm a British citizen living in Taiwan. I have not been a UK tax resident for 7 years. I have no UK income.

I'm looking to invest in a UK REIT ETF, specifically IUKP.L through a US investment platform called Interactive Brokers (IBKR).

My understanding is that 20% tax will be withheld by the UK government on all dividends paid out from this REIT.

It is also my understanding that as a British citizen I am eligible for a tax free allowance of £12,570 despite not being a UK tax resident.

My question is, if I keep my my REIT dividend earnings below £12,570 per year, will the 20% withheld throughout the year be refunded to me when I submit my self assessment tax return? 

If so, do I have to inform the HMRC that they already withheld this amount from me? I presume that they won't automatically just know that they withheld it from me since I'm using an overseas brokerage.

All advice welcome,
Elliott


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## JustLurking (Mar 25, 2015)

elliottmarcj said:


> My understanding is that 20% tax will be withheld by the UK government on all dividends paid out from this REIT.


Are you sure this is the case?

IUKP is an Ireland domiciled ETF, meaning it is an Irish corporation. The UK government cannot withhold tax on dividends paid by an Irish corporation to a Taiwanese resident (no matter how much it might wish that it could!). The fact that this ETF is listed and traded London does not change this; if it did, then everyone would simply trade the same ETF on Italian or Swiss exchanges instead of London.

If there is any UK tax withholding due anywhere -- and I'm not saying any is; I don't know either way -- then it would probably be on payments made by the things the ETF holds to the ETF structure itself; that is, internally to the ETF.


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## elliottmarcj (4 mo ago)

JustLurking said:


> Are you sure this is the case?
> 
> IUKP is an Ireland domiciled ETF, meaning it is an Irish corporation. The UK government cannot withhold tax on dividends paid by an Irish corporation to a Taiwanese resident (no matter how much it might wish that it could!). The fact that this ETF is listed and traded London does not change this; if it did, then everyone would simply trade the same ETF on Italian or Swiss exchanges instead of London.
> 
> If there is any UK tax withholding due anywhere -- and I'm not saying any is; I don't know either way -- then it would probably be on payments made by the things the ETF holds to the ETF structure itself; that is, internally to the ETF.


Good point, I've emailed the people who run the ETF with this question. Hope they reply. If they don't I'll probably just buy a few shares first to test it out.

If tax is withheld, for example if I bought a UK domiciled REIT, would I be able to claim this money back when submitting a tax return as long as the annual dividend payout is within my tax free allowance?


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