New tax regime may spook UK investors

New tax regime may spook UK investors

The new favourable tax regime for US shareholders will deter UK investors from buying stocks in their own country, BDO Stoy Hayward has warned.

Link: FDs overwhelmingly reject EU tax harmony

US investors will now only have to pay a 15% tax rate on dividends from UK companies compared to the 32.5% their UK counterparts are facing. According to BDO, the danger is that this favouritism will deter investors in the UK.

Stephen Herring, tax partner at BDO said that it did not make sense that a UK investor choosing to buy shares in a local company would be forced to pay twice as much tax as an individual in the US.

He said: ‘This discourages a UK investor from putting money into equities because the returns are taxed so heavily.

‘The chancellor is facing an investment crisis after the stock market falls of the past year and desperately needs to review the tax regime’

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