Financial Times – Unclaimed tax costs investors £11bn
April 28 2011, 9:46 amBy Ruth Sulivan – April 24th 2011
Investors lost out on nearly £11bn ($18bn) from global cross-border investments as a result of unclaimed withholding tax last year.
This accounts for more than a quarter of the near-£40bn of global reclaimable withholding tax on dividends for 2010, according to research carried out by Goal Group, a specialist in tax reclamation.
“Fund managers and trustees should take responsibility for this. Fund managers should do this as part of their corporate governance,” said Stephen Everard, managing director.
US investors were the biggest losers last year with nearly £2bn of the withholding tax levied on income from their foreign equity and bond holdings that remained unclaimed, followed by the UK with more than £1bn, Japan £820m, Luxembourg £770m and France, with more than £700m.
The overall sum lost to investors has risen 50 per cent since 2006, the last time the survey was carried out. Mr Everard said it was essential that custodian banks took action to curb escalating losses.
“Most big custodian banks have the capability to follow unclaimed withholding tax but smaller custodians and prime brokers do not do it as it is labour intensive,” he added.
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