smuggycfa

15% tax is charged on UK on the full amount of dividend.

when the dividend arrives on the US side of the fence - you are allowed to remove the 15% of the dividend and then charge the 28% US tax on the remaining 85% of the dividend.

if you charged the US tax rate on the full dividend - the benefeciary is being dinged twice with the tax. Tax treaty allows him to be taxed only once on the entire 100% of dividend amount.

No - I meant Schweser's answer was right.

CP