What is withholding tax and are you unknowingly paying it?

Investing on the Brite Platform means you keep more of your money with
tax-free dividends.

Tax can be withheld by governments on dividends or income received by non-residents. For example, the US Government charges certain non-US residents withholding tax of 30% on any income from dividends received from US investments.

This tax is deducted from your investments at source and often most clients are unaware their funds are being charged. The higher the dividends paid in any given year the more tax you will be charged. In some cases this can be a significant figure and it mounts up over a number of years.

For example, on a £250,000 pension pot you could be charged as much as £1,000 each year in withholding tax.

Should you be paying this tax?

The good news is that if you are a US taxpayer you do not have tax withheld if you invest on the Brite Platform. It is unique in that it provides clients access to U.S. listed securities in a tax efficient way.  Many other companies’ platforms invest in securities in which tax on dividends is withheld at source.

 

The Brite Platform is different as it can facilitate dividends without withholding tax and in U.S. listed securities. A further benefit to investing in assets on U.S. exchanges versus their European counterparts is that U.S assets traded on U.S exchanges can often have lower expense ratios and higher liquidity.

Claiming the tax back

If you’re not using an investment platform such as Brite’s it is possible to claim all or part of the tax back but this can take some time and effort. You would need to ask your adviser to contact the relevant tax authorities to determine their requirements and undertake the appropriate application.

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115 Broadway, 5th Floor, New York, NY 10006, United States of America.

Tel: +1 646 891 5990.
 

800 Town & Country Blvd, Office 552, Houston, TX 77024, USA.
Tel: +1 347 471 7519

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Brite Advisors USA, Inc. is a Registered Investment Adviser with the United States Securities and Exchange Commission: File Number: 801-78041. Such registration does not imply any level of skill or training.

There is no guarantee of the future performance of financial products regardless of previous performance.

IRS Circular 230 Disclosure: Pursuant to requirements imposed by the Internal Revenue Service, any references to tax contained on this Website (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding tax penalties imposed that may be imposed on any taxpayer.