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Unless you have a Self-Invested Personal Pension scheme ("SIPP") you can stop reading now. Unless you are just interested in tax anyway!

I have been a tax specialist since 1977, and have had SIPPs since the early 1990's. However it is only in the last few years that my SIPPs have invested in individual foreign shares outside the USA.

Once I started investing in such shares, it took a little while to realise that I was losing out on foreign withholding tax refunds because my SIPP providers were not reclaiming them. Once I did, I shared the issue with my colleagues on the Policy Team of the UK Shareholders' Association ("UKSA").

I wrote a six page paper for UKSA "SIPP providers are failing their customers on foreign withholding taxes."

As a follow up, I wrote a simple step-by-step guide for UKSA members that was published in the April 2026 edition of The UKSA Newsletter. You can read it below.

Is your SIPP provider throwing away your tax refunds?

If you have a SIPP, it is possible that your SIPP provider is costing you money that you don’t even know about by not claiming withholding tax refunds that you are entitled to.

UKSA has a short article on withholding tax that you may find helpful for background reading at the following link:

https://www.uksa.org.uk/sites/default/files/2025-11/WHT_Summary_v2.pdf

[This is a short two page summary of the issues.]

I have a series of questions to help assess your personal situation. You can stop with the first “No” answer.

Does your SIPP invest in individual shares?

If you only invest in the following, you will not face the issue I am writing about.

• Exchange traded funds (“ETFs”). In practice, even though when you buy an ETF you are legally buying a share in a company, ETFs are always set up to avoid withholding tax problems.
• Open ended investment companies (“OEICs”). Similarly the OEICs available to UK retail investors are also set up to avoid withholding tax problems.

UK listed companies that invest in shares of other companies, such as investment trusts, and also other investment companies, are individual companies for the purposes of this question.

Do any of your individual companies pay dividends?

There are some companies which never pay dividends. If none of yours do, you can stop now, since this article is about withholding tax on dividends.

Is any individual company resident outside the UK for tax purposes?

If you bought the shares on a foreign stock exchange, the company is “probably” resident outside the UK for tax purposes, so you need to go on to the next question.

Occasionally UK resident companies do list overseas, but in such cases they usually also have a London listing, and in practice you are more likely to buy the shares in London. It is of course possible for a UK resident company to have its sole listing on a foreign stock exchange, but relatively unlikely.

Accordingly: foreign stock exchange = non-UK resident company.

Conversely, you may think that if you bought a company’s shares on the London Stock Exchange then you can safely rely on it being UK tax resident. That is not true. An example is Plus500 Ltd which is listed in London but tax resident in Israel.

The only way to be sure is to read the company’s accounts.

A short cut which will be right most of the time is to look at the legal status. If it is a UK incorporated “PLC” then in practice it is likely to be UK tax resident.

Conversely if a London listed company has anything else at the end of its name, like “Ltd” in the case of Plus500 Ltd, that give you a clue that the company is likely to be foreign, since UK “Ltd” companies are legally prohibited from offering shares to the public. (That is why they are called “private companies.”) That does not apply to Israeli “Ltd” companies.

Is your company tax resident in a country which has a double tax treaty with the UK?

In practice, the answer to this question will almost always be yes.

The UK has double tax treaties with over 130 countries, and you are very unlikely to ever buy shares in a company which is resident in a country other than one of these.

You can find a list of double tax treaties on the Government website at the link below.

https://www.gov.uk/government/collections/tax-treaties

Is your company tax resident in a country other than the USA?

The reason for this question is that some people who do invest in foreign companies limit themselves to the USA. They are unlikely to face the problems this article discusses.

The UK / US double tax treaty reduces the withholding tax rates on dividends paid by a US company to a UK pension fund (a SIPP is a pension fund) to zero. Furthermore, the USA’s Internal Revenue Service has procedures which enable such dividends to be paid up front without the 30% withholding tax that would otherwise apply.

My experience with both of my SIPP providers is that they are well geared up for this procedure and apply it properly. The same is likely to be true for your SIPP provider. You may recall your provider asking you to complete a US Form W-8BEN which is part of these procedures.

If you want to be sure, you can read on for an explanation of how to check. Otherwise, you can stop now if your answer to this question is “no” since you are unlikely to have lost any withholding tax refunds.

Does the double tax treaty reduce the withholding tax on dividends?

The only way to be sure is to read the relevant double tax treaty, which you can find via the above link.

In practice, almost all UK comprehensive double tax treaties do reduce the withholding tax on dividends. (Some treaties are not comprehensive but only cover limited topics such as shipping and air transport profits.)

Typically, the country will have a standard withholding tax rate that applies to all foreign shareholders, wherever located, and then the treaty will specify lower withholding tax rates for UK recipients, with different rates for different categories of UK recipient.

For example, Israel’s standard withholding tax rate is 25% (increased to 30% of you own more than 10% of the company, which is unlikely to apply to your SIPP.)

Article VI of the UK/Israel treaty governs dividends. Article VI(3) reduces the 25% down to zero if the dividend is “beneficially owned by a pension scheme that is a resident of the [UK].” That provision applies to your SIPP.

Have you suffered more withholding tax than the double tax treaty rate?

The first thing to do is calculate the gross amount of the dividend that should have been paid. You can normally find the dividend per share from the company’s accounts, interim reports, website, or other information sources.

For example, staying with Plus500 Ltd, its Condensed Consolidated Interim Financial Information (Unaudited) to 30 June 2025 can be found on its website at https://cdn.plus500.com/Media/Investors/Reports/Plus500_Financial_Statements_1H2025.pdf

Note 10 gives details of recent dividends. From that note, you can see that the dividends paid per share were as follows:

Since you know how many shares your SIPP held, you can work out how much gross dividend you should have received. If your SIPP’s cash account is in GBP rather than USD, you of course need to look up the exchange rate to convert the expected dividend into sterling.

You can then compare the expected dividend receipt with the actual receipt. I expect you to find that you have suffered 25% withholding tax. If your SIPP provider has recovered the excess withholding tax, (so that you only suffered the tax treaty rate, which in the case of Israel is zero), you should see a cash receipt at some point in your SIPP’s cash account.

If your endpoint is that you have suffered more tax than the treaty rate, you can proceed to the next step.

Final step

If you have suffered more withholding tax than the treaty rate, I recommend asking your SIPP provider what they are going to do about it.

Because your shares are held in a SIPP, you have no standing with the foreign tax authority to seek any double tax treaty relief. The shares are owned by your SIPP, and the SIPP trustee is the party which is entitled to seek the application of the double tax treaty.

Closing comments

I suspect that amongst UKSA’s members quite a few will hold individual foreign shares in their SIPPs. There are many household names, such as Siemens, Volkswagen, Novo Nordisk, etc. which may be popular holdings.

Accordingly across the membership the amounts of excessive withholding tax may add up to a significant sum.

Disclaimer

While care has been taken writing this article, it does not constitute financial or tax advice. Neither Mohammed Amin nor UKSA accept any responsibility to any person who acts, or refrains from acting, as a result of reading this article. Readers should seek professional advice on their circumstances if appropriate.

Mohammed Amin MBE FRSA MA FCA AMCT CTA (Fellow) is a former tax partner in PricewaterhouseCoopers and a member of the UKSA Policy Team. He is writing in personal capacity.