Selfwealth no longer accepts buy orders for Publicly Traded Partnership (PTP) securities. You may still sell existing PTP holdings, however a 10% withholding tax will apply to your gross sale proceeds.
This change is the result of a new provision introduced by the U.S. Internal Revenue Service (IRS) under Section 1446(f) of the Internal Revenue Code (IRC), which primarily impacts Non-U.S. Residents investing in PTP securities. As demand for these securities is expected to decrease as a result, Selfwealth — through its trading partner Phillip Capital — has removed PTP securities from its buy trading offering in order to maintain low brokerage costs for clients.
For the full IRS announcement, visit: irs.gov/individuals/international-taxpayers/partnership-withholding
What does this mean for my PTP holdings?
Unless a specific exception applies, from 1 January 2023 a 10% withholding tax applies to:
- The gross proceeds from selling a PTP security
- Certain distributions paid by PTP securities
If you sell PTP securities on or after 1 January 2023, the 10% withholding tax will apply to your gross sale proceeds, along with additional administrative fees.
Example: On 10 January 2023, Andrew sells USD $10,000 worth of stock in a PTP security. A 10% withholding tax is applied to the gross sale proceeds, resulting in a tax charge of USD $1,000.
Section 1446(f) Withholding Tax Summary
| Type | When does it apply? | Rate | Effective |
|---|---|---|---|
| Section 1446(f) | PTP sales and certain PTP distributions | 10%* | New — from 1 Jan 2023 |
* A 0% rate may apply where a specific exception is met. Consult a registered tax professional to determine whether an exception applies to you.
What stocks are affected?
A list of securities potentially impacted by these changes is available as an attachment. Please note this list is provided for reference only and is subject to change without notice. It is not an exhaustive list of all PTP securities in scope for Section 1446(f).
Please note: Selfwealth and Phillip Capital reserve the right to amend or change trading restrictions on listed securities at any time. Phillip Capital assumes no responsibility for the timeliness, accuracy, or completeness of the securities list. Selfwealth cannot provide tax advice. If you are unsure how these changes affect you, we recommend consulting a registered tax professional.