Before you can buy US shares, you need to complete a US tax form and return it to us. You may also benefit, depending on your circumstances, from a reduced rate of withholding tax on US sourced income (such as dividends).
When dividends, interest payments or some other types of corporate settlement are made by foreign corporations or governments, Withholding Tax will usually be deducted at the point of payment and paid to the government of the country initiating that payment. The amount of Withholding Tax deducted can differ from country to country and will affect the value of the returns.
If you receive foreign payments from trading international securities through us, the amount of Withholding Tax you have paid will appear on your consolidated tax certificate, which can be viewed online. If you are not registered online we post this certificate to you at the end of the tax year.
It is your responsibility to make sure you complete the right form for your circumstances. If you are completing a W-8BEN form, please refer to the ‘How to’ guide first. Further help can be found at www.irs.gov under ‘Forms & Instructions’.
A Non-US individual such as a UK resident would ordinarily complete a W-8BEN:
The W-8BEN form is valid for three calendar years following the year in which you sign it, unless your personal circumstances change. Please let us know within 30 days if this happens. We will contact you when your form is due to expire.
Ordinarily if you complete a W-8BEN form you will only pay the 15% Withholding Tax rate instead of 30% on US listed shares paying US sourced dividends. For UK listed shares paying US sourced dividends a 30% Withholding Tax rate is applied even if you have a W-8BEN form in place.
For example, you would receive $70 on a $100 dividend.
A US person would ordinarily complete a W-9:
IMPORTANT: We can only accept completed forms from the email address you have registered with us.
There are two ways you can email the completed form:
Please email your completed form to StockbrokingUSTaxForm@lloydsbanking.com. We aim to log all forms within one working day and we’ll text you confirmation when it’s complete.
Print and return by post
Please send your completed form to: Customer Registration Department, Lloyds Bank Share Dealing, Lovell Park Road, Leeds LS1 1NS. The form we receive from you must be completed and signed in pen, and not a copy.
We have certain duties to the US tax authority for customers holding US shares and receiving income from the US. We must request and receive documents to comply.
When you complete a US tax form you may benefit from a reduced Withholding Tax rate. For example, you may be eligible for a reduced rate of 15% Withholding Tax on your US dividends, instead of the standard rate of 30%. This means that you may be able to receive $85 (net) from a gross U.S. dividend of $100, rather than the standard $70 (net).
Foreign markets will involve different risks to UK markets. In some cases the risks will be greater.
|Culture||Language and cultural differences between the UK and foreign markets may mean that there is a lack of information, or difficulty in obtaining information you may consider important to your trading decisions.|
|Currency Risks||When trading on foreign markets or in foreign denominated contracts, the potential profit or loss arising from such transactions can be affected by fluctuations in foreign exchange rates.|
|Economy and Politics||General economic and political factors such as inflation or fluctuations in interest rates within the UK may impact overseas markets. In addition, there may be no correlation between the general economic outlook and market conditions within the UK as compared to foreign markets. These may be less or more favourable.|
|Emerging Markets||Emerging markets tend to be less developed than the UK model and this can lead to greater volatility in securities pricing. This can mean the value of your investments may quickly change.|
|Shareholder Rights||As a shareholder who is resident in a different jurisdiction to that of the company you're invested in, you may find that you're excluded from certain shareholder rights and benefits. For example, the ability to participate in corporate events, such as Rights Issues.
This means that you might not receive the same treatment as other shareholders and you could suffer economic losses as a result.
|Taxation||Tax laws in other countries are different to those in the UK. In many countries the local tax authorities will withhold an amount of tax which exceeds the rate which would apply in the UK. In particular it’s worth remembering that ISAs and SIPPs will only shelter you from UK tax.
The treatment of tax is therefore likely to affect the value of and any returns you might expect from foreign investments.
|Trading and Settlement||Trading volumes in foreign markets can be smaller than those in the UK. This can mean that reduced liquidity in overseas markets makes it more difficult to sell shares you have bought. Delays in settlement may also occur.|