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Posted Fri, 19 May 2023 11:33:54 GMT by scottie246
I'm a UK taxpayer, resident in the UK. I own shares in several Australian companies (I inherited them). When dividends are issued, the notification includes a reference to franking crediMy understanding is that this is tax paid by the issuing company to the Australian authorities, on behalf of the shareholders receiving the dividend. Australian taxpayers who are resident in Australia are instructed to add the franking credit to the dividend received and declare that as the gross dividend. They then declare the franking credit as tax already paid on the dividend income. My question: given the treaty arrangements in place between the UK and Australia to help avoid double taxation, should I be doing the same when I declare the dividend income on my tax return? That is, can I declare the franking credit as tax already paid in Australia on the dividend income?
Posted Wed, 24 May 2023 14:21:19 GMT by HMRC Admin 5

The double taxation agreement between the UK and Australia, at article 10, advises that dividends from Australia resident companies, owned by a resident of the UK, may be taxed in the UK.  

However, it also states the dividends may also be taxed in Australia, but that this is limited to 15% of the gross dividend.  Please see -


As you are resident and domiciled in the UK, HMRC has the right to tax your world-wide income. This includes the Australian dividends, which you should declare in the foreign section of SA106.  

You can claim a foreign tax credit for the foreign tax paid, up to a maxmimum of 15% of the gross dividend using the form here -


Thank you.

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