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Posted Sun, 19 Nov 2023 14:05:20 GMT by phguk
I've just reported some foreign dividends which are under the £2000 annual allowance limit but have since noticed that my taxable income has increased. What is the purpose of the annual allowance then ? Until now I've assumed that dividends inside the allowance are tax free but the HMRC calculation suggests otherwise (to my untrained eye).
Posted Wed, 22 Nov 2023 13:58:48 GMT by HMRC Admin 19

Combined UK and foreign dividends below £2000, are not subject to tax. They will appear in the calculation as being taxed at 0%.  

This remains the case whether you pay higher rate tax or not.

Thank you/
Posted Fri, 22 Dec 2023 15:10:43 GMT by Aussie82
Hi HMRC, Situation: • I have several sources of Australian income – not just dividends. • All my dividends come from Australia. • For 2022-2023, my gross amount of dividends is under £2000. • Currently, my Australian dividends are added towards my taxable income. Question: • Should I be claiming Foreign Tax Credit Relief if I'm within the £2000 annual allowance? Thanks in advance.
Posted Fri, 05 Jan 2024 14:23:11 GMT by HMRC Admin 5
Hi Aussie82

No. foreign tax credit relief is only applicalbe if UK tax is due on the same source of income.

Thank you

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