What is a U.S. Publicly Traded Partnership (PTP) and how are these securities taxed?
A U.S. publicly traded partnership (PTP) is a business organisation owned by two or more co-owners whose shares are regularly traded on an established securities market.
Section 1446(f) of the U.S. Internal Revenue Code imposes new withholding and reporting requirements on sales of a partnership interest. Generally, the securities affected are classified as partnerships for U.S. tax withholding purposes. Such securities include Master Limited Partnerships, Publicly Traded Partnerships, and Exchange Traded Funds.
All non-U.S. tax resident or citizen accounts holding securities that are in the scope of section 1446(f) will be subject to additional withholding requirements.
Current section 1446 regulations already extend to include withholding on partnership distributions. Additional requirements include a new withholding rate on distributions as high as 37%, and a 10% withholding tax on proceeds of sale for partnership securities, regardless of whether a gain or loss has occurred.
Please review Section 1446 regulations with your tax professional to determine whether you will be subject to the new/increased U.S. withholding tax and additional reporting requirements.
What reports does Superhero provide?
Superhero does not provide taxation advice, but does provide a number of reports free of charge when you sign up for a trading account that may assist with tax reporting. These reports can be found in the Reports tab of your Superhero account via your web browser or mobile app and include:
- Realised Gains Report: Shows your realised (traded) gains between the dates selected.
- Income Report: Shows your dividends between the dates selected.
- Attribution Managed Investment Trust Member Annual Statements: detailed information regarding dividends for exchange-traded funds (ETFs).
Can I add my IRD number after completing the tax questionnaire?
You sure can. If you would like to add or change the internal revenue department (IRD) number you initially provided Superhero during our tax questionnaire, please contact us via chat.
How do I provide my tax details?
If you need to provide your tax details, or if you have made a mistake when completing our tax questionnaire, please contact us on chat.
What is a W-8BEN?
A W-8BEN is a form relevant to you if you’re not a US citizen or tax resident and you trade US shares or ETFs on your Superhero account.Superhero can rely on a validly completed W-8BEN form to determine:
(a) your status as a foreign person (i.e. not a US citizen or tax resident), and
(b) the withholding tax rate applicable to US source income.
Individual account holders will complete a digital W-8BEN during Superhero’s onboarding process.
How do I provide my IRD number to Superhero?
You will be asked to provide your IRD number to Superhero during our tax questionnaire when you make your first deposit with Superhero. If you need to update the tax details or if you have made a mistake when completing our tax questionnaire, please contact us on chat.
Why do I need to complete a tax questionnaire?
In order to meet both tax reporting and withholding obligations, we need to ask you for some information regarding your tax residency status. You will be prompted to complete this when you make your first deposit with Superhero.
To complete the Superhero tax questionnaire:
- Select country of birth;
- Then your country of citizenship (can be more than one);
- Choose your country of tax residency (typically the country you reside and pay tax in);
- Complete the W8-BEN Tax Certification declaration.
More information on W8-BENs can be found here.
Why does Superhero need my tax information?
For us to meet our tax reporting and withholding obligations, we need more information from you when you make your first deposit with Superhero.
By collecting information on your citizenship, tax residency status and tax identification numbers, we will be able to fulfil our tax reporting obligations. In certain circumstances, we must ask for and you are required to provide additional information, whereas some information we ask for is optional – we will provide further information where necessary.
When investing in US securities, the additional information (including a declaration) you provide will constitute a W8-BEN in relation to withholding tax under a tax treaty between your country of tax residence and the US Government (if applicable).
