Should I sign W8-BEN form as a UK investor buying US stocks?

The W8-BEN form is actually designed to PROTECT you as a non-US person. It's completely normal and you should definitely sign it if you want to invest in US stocks. Without this form, the brokerage would have to withhold 30% of any dividends you receive from US companies. By completing the W8-BEN, you're basically telling the IRS "I'm not a US taxpayer" and depending on the tax treaty between the UK and US, you'll typically only have 15% withheld instead of 30%. You're not creating any obligation to file US tax returns or deal directly with the IRS. You're actually doing the opposite - you're officially documenting that you're NOT subject to full US taxation. The form is generally valid for 3 years before you need to renew it.

I was in the exact same situation last year and found this amazing service called taxr.ai (https://taxr.ai) that was super helpful with international tax documents like the W8-BEN. I was totally confused about how to fill it out properly and worried about making mistakes. They have this document review feature where you can upload your completed form before submitting it, and they check for errors and give feedback. Saved me from making a mistake with my foreign tax identification number section that could have caused problems. Their explanations were really clear about what each section meant in practical terms, not just legal jargon.

Alright I need to eat my words about taxr.ai from my previous comment. I decided to try it after continuing to struggle with my W8-BEN form and it was actually really helpful. I was filling out the tax residency section wrong (I have dual citizenship but am UK tax resident) and they caught it straight away. Their explanations were really clear about the treaty benefits too. They actually showed me exactly how the 15% withholding works with examples based on potential dividends from my US investments and explained how to properly claim relief on my UK self-assessment. Definitely worth it for the peace of mind knowing I've done it correctly.

If you run into any issues getting your W8-BEN processed or have questions after submitting it, I highly recommend Claimyr (https://claimyr.com) if you need to actually speak with someone at the IRS. I had a situation where my broker said my form was rejected by the IRS system but couldn't tell me why. I tried calling the IRS international helpline myself but kept getting disconnected or waiting for hours. Claimyr got me connected to an actual IRS agent in about 20 minutes who explained exactly what was wrong with my submission. They have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c

I need to apologize for my skepticism about Claimyr. After continuing to get nowhere with the IRS directly regarding my W8-BEN question, I tried the service. Within about 30 minutes I was actually speaking with someone at the IRS international tax department who explained exactly what was happening with my withholding. Turns out there was confusion about my form because I had moved addresses in the UK since my initial submission. The agent was able to update my information directly and confirm that my withholding rate would be correctly applied at 15% instead of 30%. Saved me potentially hundreds in incorrectly withheld dividends from my US stocks.

Just to add my experience - I've been investing in US stocks for about 5 years from the UK and the W8-BEN is completely standard. Every UK broker will ask you to complete it for US investments. One thing to remember is that it expires every 3 years, so you'll need to renew it. I've had dividends incorrectly withheld at 30% instead of 15% because I forgot to renew my form once. What a pain that was to sort out!

One thing nobody's mentioned - make sure you fill in your UK National Insurance number in the foreign tax identification section. That's a common mistake that causes forms to get rejected. And double check your date format - the US uses MM/DD/YYYY format while we use DD/MM/YYYY in the UK.

Just wanted to add some reassurance from someone who went through this exact same worry! I was terrified about signing the W8-BEN when I first started investing in US stocks about 2 years ago. I kept thinking "what if I mess up my taxes or get in trouble with the IRS?" The reality is it's incredibly straightforward. Your broker will guide you through it, and as others have mentioned, you're actually protecting yourself by completing it. I've never received any correspondence from the IRS directly - everything goes through your broker. The only "gotcha" I experienced was when I moved house in the UK and forgot to update my address on the form. My dividends got withheld at the wrong rate for a few months until I noticed and updated it. But even that was easy to fix through my broker's platform. Don't let the fear hold you back from diversifying into US markets - it's really not as scary as it seems when you're new to it!