£250m Unreclaimed By Investors Every Year
July 4 2011, 5:23 pm
According to recent research, investors in foreign shares are losing out on £250m every year because they do not reclaim tax that is deducted from their dividends.
When companies are paying dividends to overseas investors, many countries will apply a withholding tax to the dividends before it reaches the investors. It is then up to the investor to reclaim anything they are owed.
For UK investors, there are double taxation treaties with different countries, at least a 100. Investors are able to reclaim the difference between what is normally taxed in the foreign country and the lower rate listed in the specified treaty.
However, according to studies, only 7% of all possible withholding tax on dividends is being reclaimed globally. It is estimated that investors lose about 13% of their total possible returns.
For UK investors investing in US shares, about 30% of is withheld from their dividends. UK residents are able to reclaim about 15% of that back, meaning for £1000 dividends, £150 can be reclaimed from the £300 deducted.
Many investors choose not to reclaim this money because their investments are not significant enough to make the refund process worth doing, or would like to avoid the hassle. For those who do find reclaiming that money a worth-while endeavor, organizations like Goal Group can help to ensure that their clients are receiving all the money they can.
