Thanks Merlo, that clears it up a bit. As it stands I have submitted the W8-BEN form with one broker (HSBC) so that should be fine, as that will mean I have claimed my tax treaty benefits with them. I assumed the new broker I have chosen for my pension
(Hargreaves Lansdown) would do the same but they refuse to handle these forms, so presumably, as you point out, investors must claim on a US tax return to claim a refund on excess tax held. This seems the least preferred option as it would make sense to set up stock purchasing with the treaty benefits handled at source (broker) so as not to have to sumbit a return to US tax authorities each year, not to mention the administrative hassle. A little further information would help to resolve my remaining issues and close this answer.
Can you explain how my dividends received with the new broker Hargreaves Lansdown, that will not handle these forms for me, will be taxed? Should I assume that the full 30% will be taken from these dividends and lost to me if I do not submit a US tax return annually to recover this? Further I also have a share trading account with this company, just like the HSBC one I hold, but I also have a SIPP (self invested personal
pension) with them in which I can directly buy shares. Would the holdings within this pension wrapper be subject to any different tax consideration from the US perspective in comparison to my standard share trading holdings? I ask because I read the tax treaty that you referred to and it states
3. Notwithstanding the provisions of paragraph 2 of this Article, dividends shall not be
taxed in the Contracting State of which the company paying the dividends is a resident if the beneficial owner of the dividends is a resident of the other Contracting State and either:
a) a company ....
b) a pension scheme, provided that such dividends are not derived from the
carrying on of a business, directly or indirectly, by such pension scheme.
This would seem to suggest that my pension holdings should be subject to zero tax. Or am I misunderstanding the text?
Many thanks for your attention in this matter.