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Withholding Tax on savings
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Anonymous Post
Posted: 23 September 2010 11:09:57(UTC)
#1
Anonymous 1 needed this 'Off the Record'

Have got a small amount in a Savings Account in Poland (part of the EU), have had Polish tax deducted at source. What is the tax position wrt UK., I am resident and domiciled in the UK. Can it be reclaimed under Double taxation? Are there any EU wide rules applicable to such foreign savings?
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Macek Muri
Posted: 23 September 2010 14:11:05(UTC)
#2

Joined: 29/10/2008(UTC)
Posts: 3
You are due to pay income tax in UK on the interest on your savings abbroad. You need tell the taxman how much income tax you have paid in Poland and they will deduct this amount from the tax due here.

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john j kelly
Posted: 23 September 2010 21:37:01(UTC)
#3

Joined: 15/07/2009(UTC)
Posts: 1
In France a bureaucratic system has been introduced in the last 2 or 3 years, presumably in response to EU or bilateral regulations on double taxation. A central office our FR bank, LCL, on behalf of the FR tax office requires details of one's passport, birth certificate, UK tax regime/office, tax address & tax number. If satisfied they refrain from deducting tax at source. The bank tried to demand these details every year until I told them that they do not change very often!
Our bank manager & staff have no knowledge of - still less any competence on - Double Taxation or Avoir Fiscal.
The LCL Central Office at Montpellier provide no telephone number nor any help or advice on any question that might arise! There is a concerted attempt to minimise the burden of their services to their non-resident clients and to the French Tax Office!

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Richard Curtis (Deputy Editor, Taxation)
Posted: 24 September 2010 00:07:41(UTC)
#4

Joined: 04/11/2008(UTC)
Posts: 4
In such circumstances one should see whether there is a double taxation agreement that provides for any special rules regarding interest arising in one country and paid to the resident of another. There is a double taxation agreement between the UK and Poland. With some exceptions, both countries have the right to tax interest. Currently, the Polish payer can withhold tax of up to 5% of the capital (http://www.hmrc.gov.uk/manuals/dtmanual/DT15408.htm) and presumably this is what has been paid here.
The full gross amount of interest should be declared on the UK tax return and the tax paid should also be shown. The 'Foreign' pages should be used (http://www.hmrc.gov.uk/forms/sa106.pdf) as an additional page to the self assessment tax return. The UK will give credit for the Polish tax paid against the UK tax liability. Note that, if there is no UK liability, this credit will not be repaid by HMRC.
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Anonymous Post
Posted: 24 September 2010 18:13:19(UTC)
#5
Anonymous 2 needed this 'Off the Record'

Withholding tax applies also to dividends. Many UK residents who held Abbey or Alliance & Leicester shares now find that their holdings are with the Spanish bank Santander. The Spanish withholding tax is 19% compared with 10% for share dividends in the UK.
Does HMRC allow any refund of the 9% excess?
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