Have Tax Questions? Ask a Tax Expert for Answers ASAP
Thank-you for this.
Unfortunately I have been advised that like Boris Johnson I am what they call an "Accidental American" someone who was born there but never lived there etc. etc. I am supposed to be able to tell the American taxman what the notional distributions have been on my ISA, which they tax, but of course I have absolutely no idea how to calculate them.
By the provider I suppose you mean a company like M & G (for their Recovery Fund). But I would still be not sure once I get the dividend amount from, e.g. M & G, how to come up with a figure of what the notional distribution would be on my particular sum invested.
For instance if I had invested £10,000 and the dividend on the accumulation fund was shown as 1.715p (not real figures), what do I do, multiply or divide or what?!
May I make a suggestion. I spent so much time in the States the other year that I came within the IRS radar. I was telephoned and advised the IRS that I was UK domiciled and paid all my taxes within the UK. The official thanked me and told me I would not be further troubled and I haven't. Why not adopt that line with the IRS if they call?
M&G Recovery Fund will provide you with the actual dividend distributed if you ask them, indeed it may well be on their web site. You just multiply the rate by your holding for the answer. Don't forget that it will have been subject to the notional 10% tax rate anyway so you probably do not have any additional liability. Dividends from the Recovery Fund are, in my experience, small beer anyway!
Please be so kind as to rate me before you leave the Just Answer site.
That bit about the notional 10% tax rate having been deducted is very useful, but does that really apply to a tax-free ISA? I would be grateful if you can tell me on this, it could save me quite a bit of money.
My sister would agree with you, but apparently I can renounce (expatriation!) my American ciitizenship after 5 years tax returns have been paid up! Unexpected tax demands on UK pensioners can kill with heart attacks or strokes following on, and basically I am inclined to pay up and to get it "sorted". I think the benefit of not having been born there and become an accidental American citizen is worth a lot to you and others.
Incidentally it was only by reading about Boris in the papers before Christmas that I realised that these horrors must apply to me likewise, although Boris has now actually gone and got a US passport. Is he planning to run as Mayor of New York? In yesterdays' papers he said he was going to pay up this week, over £100,000.
Grateful for a reply on my first point.