Find general guidance about taxes when using Wise Interest or Stocks.
When you turn on Wise Interest or Stocks, you’re investing in units in a fund. You can see more information about the funds here.
If you’re a UK tax resident:
There are two types of tax you might become liable for when using Wise Interest or Stocks: capital gains tax and income tax.
Your tax year starts on 6th April and ends on 5th April.
To understand if you need to pay tax when you use Wise Interest or Stocks, you can request a tax statement that shows what income and capital gains you may need to declare.
Downloading your tax statement
You can request and download your tax statement by logging in to your Wise account on desktop or in the Android app:
Select your profile name in the top-right (on desktop) or the top-left (if using the Android app) corner
Select Statements and reports
Select Tax statements
It takes up to 10 days to create your tax statement, so make sure you request it ahead of time.
Speak to your tax, legal or accounting advisor if you have any questions about your taxes or filing a return. Wise is not able to advise on your personal tax situation.
Capital Gains Tax
You may be liable to pay capital gains tax if you move money out of the currency you hold in Interest or Stocks — through spending, sending, converting or simply moving money within Wise or to an external account. This will trigger Wise to sell units in the fund, known as disposing.
You likely won’t need to pay any capital gains tax in this scenario if your gains fall within your Capital Gains tax-free allowance. If your total capital gains exceed this allowance, which includes gains from other investments (not just Wise), the gains would be subject to capital gains tax.
Income Tax
Wise Interest and Stocks use funds that sometimes generate Excess Reported Income (ERI). ERI is income the fund makes that hasn't been distributed to investors. This means, you won’t see this ERI amount in your balance because it was reinvested into the fund. However, due to UK tax rules, ERI is treated as if you’d received it as an foreign income for tax purposes.
This means that if your ERI exceeds your personal savings allowance, you may have to pay income tax when you use Interest or Stocks. Remember that your personal savings allowance includes interest you’ve earned elsewhere, not just Wise.
You can find the amount of ERI generated in your tax statement.
Learn more about ERI on gov.uk.
Understanding if you need to file a UK tax return
It’s unlikely you’ll need to pay tax solely from your use of Wise Interest or Stocks if you’re within your capital gains and personal savings UK tax-free allowances. If you exceed these allowances, which includes any other interest income and capital gains (not just from Wise), you may have a tax liability that needs to be reported. However, you could need to file a tax return, if you've earned foreign income (known as ERI) on your Wise Interest, even if it falls within your available tax-free allowances.
You can use HMRCs website to work out if you need to submit a tax return and here you can check how to register for Self Assessment, if applicable.
Understanding your UK tax statement
Your tax statement is made up of two sections:
Income: this is the total Excess Reported Income (ERI; interest and dividends) generated during the tax year
Capital gains and losses: this is the total amount of realised capital gains generated through sales (disposals) of units through the year.
Each section has a similar format — there's a summary page at the start which is followed by a detailed breakdown of all the transactions which make up the total.
It's likely that you can find everything you need to submit your tax return in respect of your Wise investments on the two summary pages.
The income section of your tax statement
The income section shows the income, considered as foreign income due to the funds being domiciled outside the UK, that you've earned during the period you used Interest and/or Stocks.
If you see Excess Reported Income — Interest — this relates to your use of Wise Interest. HMRC guidance says that this should be reported in the Foreign Pages (SA106) of the tax return as ‘Interest and other income from overseas savings’.
You can find the ‘country or territory code’ of the fund from the same page.
There's no foreign tax taken off or paid on this income.
If you see Excess Reported Interest — Dividends — this relates to your use of Wise Stocks. HMRC guidance says that Excess Reported Income dividends should be reported in the Foreign Pages (SA106) of the tax return as ‘Dividends from foreign companies’.
You can find the ‘country or territory code’ of the fund from the same page.
There's no foreign tax taken off or paid on this income.
The ‘reporting period end date’ shows the fund reporting period end date. If you hold units on the reporting period end date, ERI will be allocated to you.
The ‘value date’ shows the ERI distribution date for the fund, which is the date you're deemed to receive the ERI.
Check the HMRC guidance for more information.
The capital gains section of your tax statement
The rows you’ll likely need to check from your tax statement are:
number of disposals
disposal proceeds
allowable costs
gains in the year, before losses
losses in the year
This information could be used to complete the Capital gains summary (SA108) under Listed shares and securities.
You could attach your Wise tax statement to your self-assessment tax return to provide details of disposals of Wise Stocks or Interest to HMRC.
Other helpful information to understand about the information on your tax statement
The returns we show you in your Wise Account are likely different from the capital gains and income you see on your tax statement. The tax statement only shows your realised gains — which are generated when you sell units by sending, spending on your card or transferring money out of your account. The returns we show in your account are total returns, including those you haven't realised yet. Please use your tax statement as the point of reference for your tax return.
You might see losses in your tax statement (numbers in brackets), even if you're using Interest. This might be because you've moved money in and out of the account consistently, leading us to both sell and buy units on your behalf. The UK tax system has ’share matching’ and anti avoidance rules that determine how capital gains should be calculated. These rules are accounted for in your tax statement, which could make it look like you've made a tax loss, even when you haven’t.
The ERI is taken into consideration in the capital gain calculation, ensuring you aren't subject to double tax (it's treated as a deductible cost for capital gain tax purposes).
Wise doesn't withhold nor pay any tax on your behalf when you use Stocks or Interest.
An example
Here’s a fictional example of how someone might become liable to pay both Capital Gains Tax and Income Tax when using Interest or Stocks.
Andrew uses Wise. He has some existing savings and investments, so he's already over his personal savings and Capital Gains tax-free allowances. He turns on Interest for 10,000 GBP held in his Wise account on 1 January 2023. At the time of doing so, each unit in the fund costs 100 GBP, so 10,000 GBP buys 100 units.
By the period ending 30 September 2023 his share of ERI is 0.50 GBP per unit. That means he’s liable to pay Income Tax on 50 GBP of ERI (0.50 GBP x 100 units). The 50 GBP of ERI would be taxed at the ordinary UK Income Tax rate, reducing the amount of Capital Gains he’ll owe by increasing the book cost of the units held by the same value of the ERI — you can see how this is calculated below.
On 31 December 2023 Andrew withdrew all of his money. Over the last year he hasn’t spent or sent any money and has gained 400 GBP on his initial 10,000 GBP. This is because each unit in the fund is worth 104 GBP by this date.
10,400 GBP - (10,000 GBP + 50 GBP ERI) means Andrew’s gain is 350 GBP.
This 350 GBP gain is then taxed at the UK Capital Gains Tax rate.
As he’s already over his allowances, Andrew would need to declare this income and capital gains in his end of year tax return.
As well as government tax-free allowances, there may be other reliefs that are available to you to mitigate income and Capital Gains Tax. Speak to a legal advisor, accountant or tax advisor if you want to learn more.