Diversified Energy Share Discussion Threads

[cassini] 29/3/2023 12:39

PS: A useful bit of info I just received from ii - who replied this morning to my to my message to them yesterday - is that 'stand alone' SIPPs are automatically rated at 0% Withholding tax even without a W-8BEN.

So really, as far as ii is concerned, only ISA's need a W-8BEN.

Here is ii's reply to my message yesterday asking if I still had a valid W-8BEN (in the meantime I realised mine had actually expired and I filled in a new one last night anyway).

Thank you for your Secure Message.


For stand alone SIPP's they do not require a W-8BEN as the withholding tax on US dividends is automatically 0%.


You do not have a valid W-8BEN linked to the account so the withholding tax applied was 30% in your ISA.


I have just approved the W-8BEN you completed yesterday and this is valid on the account until 31/12/2026. This means for future US dividends received in the ISA account the withholding tax will now be 15% at source.

[scrwal] 29/3/2023 12:37

Cassini
I got badgered by ii at the start of this year stating my W8 would expire at the end of this year! So I renewed on 3rd Jan and it expires 31-12-2026.

You should still be able to access the form even if it is to complete a new one so there may be a glitch on your account.

[1knocker] 29/3/2023 12:34

HL are not the cheapest platform, but they do at least remind me in good time when my W-8BEN is approaching expiry date.

[cassini] 29/3/2023 12:20

Farrugia,

That is US Withholding tax at 30% due to the fact DEC is domiciled in the USA.

You can reduce that tax to 15% in an ISA or 0% in a SIPP if you fill out form W-8BEN for your broking account. If you've already filled one out a while ago it could have expired as mine just has.

Slight caveat, if your broker has a bank as a parent (e.g. Halifax?) as far as experience here goes, they will not recover Withholding tax for you, something to do with the limits of their licensing. See the header.

[aleman] 29/3/2023 12:17

Gross dividend $437.5 = £361.41. ($=£0.82609) Tax @30% = £108.42. Net dividend £252.99.

Has somebody used an incorrect exchange rate?

[farrugia] 29/3/2023 11:57

just received the dividend on my 10,000 shares
Gross Dividend Due: 355.09 in GBP
but I was charged 106.53 tax at source - why's that?

[laurence llewelyn binliner] 29/3/2023 10:08

For anyone using Smart Investor as their ISA provider that did not know, since adding the trading of US securities function recently there is now a tab under 'investment settings' for completing/submitting a W8-BEN to reduce the WT tax ... :o)

It is 1 per broker/provider, so 1 registered with another provider will not carry the -15% reduction across..

[aleman] 29/3/2023 08:16

I interpret this as meaning you can offset tax paid abroad but not where a double taxation agreement asks you to reclaim at source (in our case with an W8-BEN).



You cannot claim this relief if the UK’s double-taxation agreement requires you to claim tax back from the country your income was from.

[johnhemming] 29/3/2023 08:07

I haven't checked this, but I think if you hold DEC outside a tax wrapper (ie in your own name or in a Ltd company) the withholding tax is counted as tax already paid by the UK tax system. I hold some DEC outside a tax wrapper and my accountants do my tax return and I think this is how it works, but I may be wrong as I have not checked.

[shanklin] 28/3/2023 23:45

Certainly agree that ii have underpaid the dividend

[3800] 28/3/2023 21:54

I too have an ii account and recieved 3.718749c in my dealing account and 3.0048p in my ISA. The gross dividend was 4.375c so the amount in the dealing account is correct ii apply a exchange rate of "their own" to convert currency. If anyone has successfully managed to persuade them to let you elect to recieve dividends in sterling from DEC please let me know. It is against ISA rules to have foreign currency in an ISA account so they automatically convert it for you. USD can be left in a dealing account and can be useful if you buy on the NYSE

[scrwal] 28/3/2023 21:35

Cassini
Try and do a dummy trade for a US share in your ISA - if the system rejects it outright your W-8BEN is out of date.
You can also check by going to useful forms and clicking on Go to W-8BEN online which will tell you if it's live.

[cassini] 28/3/2023 21:08

Thanks for the replies,

HOLTS, you've got what you should get, approx. 15% off the divi as it's in an ISA, I'm sure that £28 you're missing is an exchange rate thing as you say, so that confirms there's a problem with my ISA as I've lost 30%. It's no big deal as I have only a small amount of DEC in my ISA, I've only lost about £8 ;0)

I've sent a 'secure message' to ii, I'll report on what they say when I get a reply as I'm sure there are ii users here who may possibly benefit from the info.

[owenski] 28/3/2023 20:49

That's quite an uplift in divi payout since last quarter all down to FX rates.

[holts] 28/3/2023 20:24

I have it in an ISa with II , I have received 1330.67 on 44285 units .

Can’t work it correctly as I believe the div was 3.61

So was expecting 1598.68 minus 15% 239.80. 1358.88

This may be ii not electing to take it in sterling , but was never asked .

So you should have at least had the 15 relief as long as wen was up to date .

[1knocker] 28/3/2023 18:29

I don't think there is any way of avoiding, or recovering, the withholding tax otherwise than by holding DEC in a SIPP.

If you hold outside a SIPP or ISA you are of course entitled to credit for the withholding tax when UK income tax on the DEC dividend is calculated.

Not much comfort I am afraid.

[lord gnome] 28/3/2023 18:19

No idea. I hold mine in an ISA and just pay the 15% withholding tax. It could be that nobody at ii has linked your SIPP W8-BEN with the new shares in your ISA.
I suggest that you give ii a call. The staff there are young and green but they do try to be helpful.

[cassini] 28/3/2023 18:16

I bought some more DEC recently and seem to have put it in my ii ISA instead of my SIPP where the rest is. I just looked at the divi that arrived in my ISA.

Working out the payment though, I am getting no tax relief at all on the withholding tax, despite having filled in a W8-BEN a while ago that successfully got me off the hook for withholding tax in my ii SIPP.

Also, oddly, my (depleted) DEC divi has arrived in my ISA, but not in my SIPP!

Any other ii users out there that can shed any light on why I'm being hit for the full withholding tax in my ISA and why it's not in my SIPP yet?

[1knocker] 28/3/2023 17:22

Nice to see my largest ever DEC dividend sitting on my account AND the highest closing price we have seen for a while. I wonder how much of that rise was dividends being reinvested? Low 90s is a better price for topping up than we would have reckoned on when DEC went ex div.

[meanreverter] 28/3/2023 13:32

riverman77: I base the 268p figure on the PDP PV-10 (adjusted) per share of $3.29 quoted on page 4 of the company's March 2023 presentation, to which the following footnote applies.

(e) Calculated as the PV-10 of PDP Reserves, adjusted for the impact of the Asset Retirement Obligation, Net Debt and Net Fair Value of Derivative Financial Instruments at 31 December of the respective periods; 2020 and 2021 calculated using shares outstanding at 31 December of the respective periods; 2023 calculated using shares outstanding at 28 February 2023;

[brucie5] 28/3/2023 12:57

meanreverter28 Mar '23 - 12:28 - 4507 of 4508
0 1 0
Three ways to value DEC (at 93p)…
--------------------------------------------------------------------------------
Good post and thank you. Out of interest, in case you're able to disclose, what is your portfolio sizing maximum for this kind of share?

[riverman77] 28/3/2023 12:33

Where do you get the PV10 figure, and does this include the liabilities, eg debt and any losses on the hedging positions, or is it just the assets? I think this is the best way to value it, providing you can get an accurate figure that includes the liabilities as well as the assets.