InvestDirect International Online Share Dealing FAQs - Tax matters
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Is the HSBC InvestDirect International Investment Portfolio an offshore service?No, it's a UK onshore service subject to UK law and tax regulations.
No. UK dividends are not subject to UK withholding tax.
Eligibility to reclaim tax deducted from dividends is totally dependent upon the terms of any Tax Treaty between the country where the tax was deducted and the country of tax residency of our client. Due to the wide range of applicable Tax Treaties, we are unable to provide specific advice.
In most circumstances, no UK tax liability will arise on income and gains from any securities. This is a very complex area, and your liability to UK tax is determined by your place of residence and your place of domicile. If you are in any doubt you are advised to seek professional advice or to study the HM Revenue & Customs guidance in their leaflet IR 20 'Residents and Non-Residents - Liability to tax in the United Kingdom'.
Following the end of each tax year, we will send you a certificate listing all dividends that you have received during that tax year. This certificate will also show the tax credits associated with UK dividends and any overseas tax deducted from non-UK dividends. UK tax residents will receive a certificate for the year-ending 5 April. All other clients will receive a certificate for the year-ending 31 December.
The HSBC InvestDirect International Investment Portfolio is based in the UK. Therefore, all dividends will be remitted to the UK.
No. We offer an execution only service for securities. We are not able to provide any tax advice. You should seek this from your own professional adviser.
The US Internal Revenue Service obliges us to report all dividend income paid to US persons. This report is submitted for each calendar year with a copy being sent to the client. The report is made on form 1099 DIV or 1099 INT.
Prior to payment, dividend payments are frequently subject to a tax deduction. These are known as withholding taxes. There is no withholding tax on UK dividends. Where a reduced rate of withholding tax is available to whole classes of clients this will be claimed by HSBC InvestDirect International and reflected in the dividend payment made to you. Where specific conditions have to be met on an individual client basis then tax will be deducted at the general rate but some or all of the tax may be directly reclaimable by the client.
Your tax residency determines the rate of US withholding tax that you suffer. It may also determine whether you should be a client of InvestDirect International or our UK service. It is therefore important that you notify us immediately if your country of tax residency changes.
The Tax Treaties affecting your own tax liability will be those between your country of tax residency and the country where your income originates.
The IRS is the Internal Revenue Service of the United States Treasury. They impose certain obligations upon us to report the income of US persons.
We are obliged to report certain information for certain clients: US Persons-we must report all dividends paid on US securities to the Internal Revenue Service.
The benefit of a Double Tax Treaty will only be claimed so far as US dividends are concerned. The client must make all other claims for relief from withholding taxes.
