When investing in overseas companies, it's important to understand how dividend withholding tax works. Many countries, including the US, Ireland, Germany, and France, impose a withholding tax on dividends paid to non-resident shareholders. This means a portion of your dividend income is automatically deducted and sent to the tax authorities of the country where the company is incorporated or tax resident.
Where the dividend is paid by a company which is a resident of a country with which the UK has a bilateral double taxation agreement, the withholding tax should be limited to the rate of withholding tax specified in the dividend article in the agreement.(1)
If you should have received a lower tax rate, due to a tax treaty, it can be possible to reclaim part of the withholding tax by contacting the tax authorities in the source country and providing information such as the dividend tax voucher(2) and a certificate of your tax residence.(3)
Freetrade does not provide a reclaim of withholding tax service, as it can be a complex and time-consuming process. Each source country has a different reclaim process(4) and the complexity and cost of the process varies.(5) The tax reclaim can then take 12 months or more.
Reclaims are often not possible against dividends received into your ISA or SIPP as double tax treaties require that the dividend income is taxable in the UK for the reclaim to be paid.
2.) Freetrade should be able to provide a statement confirming WHT amounts suffered to enable claims to be made individually.
5.) Dividend reclaim service : Euroclear charge €125 for France, Charles Stanley £100 for Switzerland
Depending on your personal tax circumstances in the UK, overseas tax suffered on dividend income can be credited against a UK dividend income tax liability through the HMRC Self Assessment tax return process.
United States withholding tax
To invest in US stocks with Freetrade, you’ll need to complete a W-8BEN form. Having a valid W-8BEN in place reduces your withholding tax on US dividends from 30% to 15% in your GIA and ISA.
As of May 2025, there is no withholding tax charged in your Freetrade SIPP on dividends from stocks that are both US listed and US tax resident.