Dividend tax from overseas

Upcoming tax year (23/24) I will receive approximately £2000 dividends (some from United States companies that are already subject to withholding tax) and interest from UK bank accounts. Including my salary, interest and dividends my income will total less than £50000. Is the tax free personal allowance (£1000) and 2023/2024 dividend allowance (£1000) combinable? If not and my dividends exceed £1000 do I need to complete a self assessment or can I declare it by phoning up and asking for my tax code to be changed once I've provided the amount I've received (this second option is what the HMRC website appears to suggest) Should I treat dividends earned from the US any differently? Many thanks

Hi Ldp87,

As the dividends are from abroad, you will need to complete a tax return for the additional tax to be
calculated as only the £1000 dividend allowance will apply to that income.
The savings allowance of £1000 is for interest only and the 2 are not combined.

Thank you.

Thank you. Would I still need to complete a tax return if the dividends come from shares held in an ISA and are paid into an ISA? For non ISA overseas dividends do these all need to be declared on a self assessment, regardless of the amount (i.e if they are less than £1000) Thank you

Hi,
 

Dividends from shares in an ISA are not taxable. Non ISA overseas dividends are treated as foreign income and are taxable in the UK.  You would need to report the foreign dividends in your self assessment tax return . Thank you.

Thank you, This HMRC web page suggests different https://www.gov.uk/tax-foreign-income/paying-tax You do not need to fill in a tax return if all the following apply: your only foreign income is dividends your total dividends - including UK dividends - are less than the £2,000 dividend allowance you have no other income to report My only foreign income is from dividends and will total less than the £1000 allowance for next year. Based on the information on HMRC website it would appear I do not need to take any action. Can you please clarify and if different to the website advise explain why I need to complete a tax return. Thanks for your help

From my original post I have miscalculated Correct is: Tax year 23/24 I will receive approximately £270 dividends from United States companies £244 dividends from UK companies

Hi Ldp87,

As long as you meet this stipulation, no tax return is required.

Thank you. 

 

I am now receiving Dividends from RSUs that have vested into common stock; awarded over a period of time as part of my remuneration package from the UK subsidiary of a US listed company. These dividends are awarded quarterly and taxed at 15% in the US, with the net proceeds being held by the US brokers in a named account When notifying HMRC of the dividends earned in the Foreign Income section does should this be on an annual basis i.e. in the UK tax year they were received (using the relevant exchange rate for each quarter) whilst they are still held in the US broker’s account? Or declare the income if/when the net proceeds of the dividend are transferred to the UK

Hello HMRC I have a question about overseas dividends. In France, a withholding tax of 13% is taken off at source on dividends from French companies. When computing UK tax it appears that the UK dividend tax is applied on the net dividends received, which means that an additional 13% tax is paid on the Gross Dividend compared to what would be paid had the dividends come from a UK company. How can this double taxation be compensated? Thanks

Hi Wal62asking

You will declare them in the tax year that they are received irrespective of whether you have transferred them to the UK or not. You also need to convert the income to sterling.

Thank you

Hi AskingtoHMRC

When completing the foreign page, enter the gorss dividend and you can then claim foreign tax credit relief for the French tax paid. This is restricted to the amount of UK tax due on the same source.

Thank you

Hi, Asking to HMRC Can you please confirm if the £2000 tax-free allowance for dividend payments for the 22-23 tax year applies to dividends from shares in foreign companies? I have completed my SA for last year and entered these amount received (which is lower than £2000) into box 6 on page TR3, BUT, this amount is then included in the ‘Total income received’ figure in my tax calculation and thus is taxed. This does not appear correct if these dividends are allowable within the tax-free £2000 amount? Many thanks for your help

I have the same question as Ian above - I was surprised to see this foreign dividend amount (less than £2000) taxed. It doesnt seem to make sense that you fill in anything over £2000 in a separate part of the form (with a view of potentially benefiting from any tax treaty) - then are required to put less than £2k in another section and are taxed at your marginal rate (15% already went to IRS with a W8BEN) in place. Please could you advise?

Same question as Ian Brewer and Z G I earnt less than £2000 in foreign dividends last tax year, but when I put that amount into the Dividends section of the form, it gets included in the "Total income on which tax is due" section of my tax calculation breakdown Surely as it's less than £2000 I would not have to pay tax on this, so why is it being included as part of my total taxable income?

Hi ZG
If you have foreign dividends of less than £2000 then you can include the foreign dividends in box 6 of page TR7 of SA100.  
You do not need to declare the dividends in the foreign section.  Please tick 'yes' to the question ""Did you receive any dividends.  If you want to claim a foreign tax credit, you ignore the guidance above and instead, declare the dividends and tax deducted in the foreign section, so that you can claim a foreign tax credit.  Do not enter in both otherwise you are duplication your dividends and doubling the income being charged to tax.
 

Hi,

Yes, as all entries on a tax return are in pound sterling, Self Assessment will add UK dividends to foreign dividends and apply the £2000 tax free threshold, with any remaining dividends being taxed at the appropriate rate.

Thank you.

Hi, Do I need to do a self assessment if the money I got for selling a family property in Portugal if the money will stay in Portugal? Kind regards mrc

Hi LMD111,
The foreign dividend is correctly shown on the calculation, as it forms part of your world wide income.
The Self Assessment calculation must reflect all aspects of your declared world-wide income.
In the calculation the first £2000 of dividends will show a tax rate of 0%, resulting in £0.00 tax being charged against the dividend.
By doing this, Self Assessment is accounting for your foreign dividends and you are able to see that no tax is being charged against it.
Thank you. 

I receive dividends from foreign companies (US, Jersey, Australia), but only within a SIPP. Do I need to declare that in my tax return?

Hi mrc

Yes.  Firstly, you will need to work out if there is a capital gain arising from the disposal, using all figures in pounds sterling and using just and reasonable exchanges rates in use at the time of acquisition and disposal.  
This would be declared on SA106 (foreign) which will allow you to claim a foreign tax credit, so you do not pay the same tax twice.  
If you are resident, but not domiciled in the UK, you have the option to use the remittance basis.  As that is not always the best option for everyone, you should consider your options.  
You can find more about the remittance basis at RDR1 (Residence, domicile and the remittance basis: RDR1).

Thank you