The UK does not impose withholding tax on dividends paid to shareholders.

Instead of a withholding tax, the UK operates a system called the dividend tax regime. Under this regime, dividends are paid to shareholders net of tax, meaning that the tax liability is the responsibility of the shareholder rather than the company distributing the dividends.

As an individual shareholder in the UK, you may be subject to tax on dividends received based on your income tax rate. The current tax rates applicable to dividend income are as follows:

1. Basic Rate: If you fall within the basic rate tax band, dividends are taxed at a rate of 8.75%.

2. Higher Rate: If you fall within the higher rate tax band, dividends are taxed at a rate of 33.75%.

3. Additional Rate: If you fall within the additional rate tax band, dividends are taxed at a rate of 39.35%.

Please visit or contact HM Revenue & Customs (HMRC) to ensure you have the most accurate and up-to-date information. https://www.gov.uk/tax-on-dividends.

If you have a diversified portfolio you will most likely have shares from all over the world. If you have a UK trading account and have bought shares from the US, the US government will charge you tax on any profit you make due to the fact you are not a US citizen.

If you complete a W8-BEN form (you can do this from the Client Office), you lower the withholding tax for dividends and interests from 30% to 15%.

If you have any further questions please do not hesitate to contact a member of our sales team at +44 2036953085 or by emailing us at uksales@xtb.com.

For any non UK clients, please visit https://www.xtb.com/int/why-xtb/contact, select the country you have registered with and contact a member of our staff.

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