Where you have had 30% withholding tax on US dividends withheld, you can as a non resident, file a non resident US tax return to claim back any excess tax held.
Why has 30% US tax been withheld?
So, in normal circumstances if a Form W-8BEN has been completed by you, the correct tax withholding should have occurred. For dividends, this is 15% (per the UK/US tax treaty). And if the payor correctly reminded you to complete the form, you wouldn't need to file a US tax return, as the correct amount of US tax would be withheld.
However, the W-8BEN expires after 3 years. And unless you keep tabs on this or get a reminder to complete a new one, you may find that your tax on US dividends doubles! to 30% withholding.
How do I claim back US tax? As a non resident, you would need to file a Form 1040NR and attach proof of the excess tax withheld (1042-S or 1099) as well as submit a treaty claim with the form. On top of this, if you have never filed before, you would also need to apply for a US tax identification number (ITIN). Without this number, the 1040NR US tax return cannot be processed, meaning your refund cannot be issued.
How to apply for an ITIN from the UK?
ITINs are issued for tax filing and reporting purposes only. They can easily be applied for from the UK by using a certified acceptance agent (CAA).
All certified acceptance agents have a license with the IRS, which allows them to certify for ITIN purposes, any identification documents - e.g. a passport or birth certificate. This identification copy has to be attached to the ITIN application.
The CAA will also sign a W-7COA (certificate of accuracy), which is attached as proof of the certification by them of the passport or identification document(s). Without this, the application will reject if using a CAA.
Just Breve is a certified acceptance agent in London, United Kingdom. We can assist with any ITIN applications - both for new ITIN numbers and renewal of existing ITINs.
Timescales for refunds and ITIN applications:
1040NR processing - this can be anywhere from 7 to 8 weeks up to 3 to 6 months or even a year. It all depends on how busy the IRS processing department is when the return is submitted. Busy periods include January to April each year and September to October each year.
ITIN processing - for international applicants this can take 7 to 11 weeks for the paper ITIN certificate to arrive. As a certified acceptance agent, Just Breve can normally call and obtain a verbal confirmation after 6 weeks if required.
Contact us today!
Tel: 0208 1444632
Just Breve simplifies US taxes for individuals and businesses throughout the world as your Certified ITIN acceptance agent in London.
If you don't live in the UK, we can still assist via Skype video call and email - feel free to get in touch with any questions you may have.