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International trading

Withholding Tax

Withholding Tax is generally deducted from dividends, interest payments and possibly other types of corporate action distributions paid by foreign corporations or governments. Withholding Tax is deducted at the point of payment and paid to the government of the country from which the payment originates (i.e. the source of the income). The amount of Withholding Tax that is deducted may differ from country to country and is likely to affect the value of the returns you may expect from foreign investments. For example, a 30% withholding tax rate is applicable to U.S. dividends.

If you have received foreign payments as a result of trading international securities through us, you can view how much Withholding Tax you have paid on your Consolidated Tax Certificate. This is available to view online. If you are not registered online then we can send you a Consolidated Tax Certificate by post following the end of the tax year.

Trading U.S. securities

Halifax Share Dealing Limited has obligations to the Internal Revenue Service (IRS) with respect to customers that hold U.S. securities and receive U.S. source income. We are required to obtain documentation from these customers that allow us to comply with these obligations and, where the customer is eligible, we can provide a reduced rate of withholding tax to their U.S. income.  Therefore, customers who intend to trade in U.S. securities or who are currently holding U.S. securities must provide a valid Form W-8 or Form W-9.

Please note that we do not provide tax advice and if you have any questions you should consult a professional tax advisor.

Downloadable forms:

Please send your completed form to:

Corporate Actions Department
Lloyds Bank Share Dealing
Lovell Park Road
Leeds
LS1 1NS

Risks of international trading

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.