Tax treatment for US company mergers
Posted: Thu Sep 13, 2018 4:15 pm
I am a UK resident and until recently owned shares in an american company called General Growth Properties (GGP). Recently this company merged with another company (Brookfield Property (BPY)) and I received cash in my account to reflect this. My understanding is that this was a capital gain and would be taxed accordingly. My brokerage company has just been in touch and asked for me to make a payment to them for 15% of the amount I received in cash. They claim the cash I have received is being treated as a 'special dividend' and is thus subject to withholding tax. I have made the point that this seems ridiculous and that I could have just sold the shares in the open market and had the whole thing treated as a capital gain (which would have resulted in me paying no tax as it is below the annual allowance). My brokerage didn't give me any information about the merger and I had no options to choose the elections beforehand so it seems quite unfair that I am effectively 15% worse off. Is this anything anyone has had any experience with?