Tax Implications for US Investors in UK Stocks

[Mjs3382]

I've had a tough time finding a definitive source on what the capital gains tax implications are for US citizens investing in UK stocks.  Recently been considering making an investment domiciled in the UK.

 

Just looking to see if anyone knows the answer - would be greatly appreciated.  Figured I might find a better and quicker response here than just looking on the internet (so far haven't found much).

[Jurgis]

Do you mean buying UK stocks in US based financial account (e.g. Fidelity, IB)? If so, it's the same as buying US stocks.

Do you mean buying UK stocks in UK based financial account for US citizen? If so, things are a bit complicated mostly because you have a foreign financial account that you have to report. There might also be issues with UK side taxing this account, but I am not sure about that.

 

[Mjs3382]

Thanks - Meant buying UK stocks in US based account.  So no taxes due to the UK?  Just typical US capital gains taxes would be owed?

[Jurgis]

Thanks - Meant buying UK stocks in US based account.  So no taxes due to the UK?  Just typical US capital gains taxes would be owed?

 

Yeah, that's right.

 

UK may or may not withhold tax on any dividends.

[Spekulatius]

UK stocks are tax friendly for US investors - there is no withholding of dividends except for UK Reits where 20% is withheld.

 

The Netherlands are also tax friendly in Europe and that is one reason why many Holding companies domicile there.