Does anyone know if dividends from Irish domiciled equity ETFs held by a UK ltd company are subject to corporation tax. I think they aren't but my accountant thinks they are.
I hold a number of Irish Domiciled equity ETFs in my UK Limited Company, for example
IShares MSCI World (IWRD)
IShares MSCI Emerging Mkts (IEEM)
iShares MSCI Emerging Mkts SmlCap (SEMS)
iShares FTSE Epra/Nareit UK Prop Fund (IUKP)
My accountant points to the following document
<mod snip>
that says
"UK resident corporate investors are taxed on distributions from fixed income ETFs under the loan relationships regime. Distributions from equity ETFs are taxed under the foreign profits regime. Again, fixed income ETFs are those that broadly hold over 60% of assets in bonds, cash, or cash equivalents"
However there are other sections on the IShares site which state things differently:
<mod snip>
"For UK resident investors, the UK tax authorities consider the income paid out by the Irish iShares equity funds to be a foreign dividend/distribution subject to dividend tax rates (or dividend exemption in case of a UK corporate investor), while income paid out by the Dublin iShares fixed income funds is considered to be interest subject to income tax rates."
<mod snip>
"From 1 July 2009, following the enactment of Finance Act 2009, dividend distributions received by UK resident companies, including the Company, are likely to fall within one of a number of exemptions from United Kingdom corporation tax. In addition, distributions to non-UK companies carrying on a trade in the United Kingdom through a permanent establishment in the United Kingdom should also fall within the exemption from United Kingdom corporation tax on dividends to the extent that the Shares held by that company are used by, or held for, that permanent establishment. Reported income will be treated in the same way as a dividend distribution for these purposes."
I've also showed by accountant the following document, but he seems to think that the ETFs are part of a tax advantage scheme since my Tax voucher doesn't show tax credits on the Ishares dividends.
<mod snip>
I've also asked Ishares, who say:
"From our understanding, any dividends from the below funds should be exempt in the hands of a UK company (according to the specific dividend exemption legislation). However, please note that we are unable to give tax advice and for this you will need to speak to a professional tax advisor."
Has anyone else here owned iShares and if so how were they taxed?
I hold a number of Irish Domiciled equity ETFs in my UK Limited Company, for example
IShares MSCI World (IWRD)
IShares MSCI Emerging Mkts (IEEM)
iShares MSCI Emerging Mkts SmlCap (SEMS)
iShares FTSE Epra/Nareit UK Prop Fund (IUKP)
My accountant points to the following document
<mod snip>
that says
"UK resident corporate investors are taxed on distributions from fixed income ETFs under the loan relationships regime. Distributions from equity ETFs are taxed under the foreign profits regime. Again, fixed income ETFs are those that broadly hold over 60% of assets in bonds, cash, or cash equivalents"
However there are other sections on the IShares site which state things differently:
<mod snip>
"For UK resident investors, the UK tax authorities consider the income paid out by the Irish iShares equity funds to be a foreign dividend/distribution subject to dividend tax rates (or dividend exemption in case of a UK corporate investor), while income paid out by the Dublin iShares fixed income funds is considered to be interest subject to income tax rates."
<mod snip>
"From 1 July 2009, following the enactment of Finance Act 2009, dividend distributions received by UK resident companies, including the Company, are likely to fall within one of a number of exemptions from United Kingdom corporation tax. In addition, distributions to non-UK companies carrying on a trade in the United Kingdom through a permanent establishment in the United Kingdom should also fall within the exemption from United Kingdom corporation tax on dividends to the extent that the Shares held by that company are used by, or held for, that permanent establishment. Reported income will be treated in the same way as a dividend distribution for these purposes."
I've also showed by accountant the following document, but he seems to think that the ETFs are part of a tax advantage scheme since my Tax voucher doesn't show tax credits on the Ishares dividends.
<mod snip>
I've also asked Ishares, who say:
"From our understanding, any dividends from the below funds should be exempt in the hands of a UK company (according to the specific dividend exemption legislation). However, please note that we are unable to give tax advice and for this you will need to speak to a professional tax advisor."
Has anyone else here owned iShares and if so how were they taxed?
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