Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Fri, 12 Jul 2024 13:35:07 GMT by Nigel
Hi, I was looking for some clarity as there are two threads that seem to contradict each other on this forum. I am a UK resident who holds Canadian shares in a UK stocks and shares ISA. These shares pay dividends, which have 15% tax withheld by the Canadian government. Can claim this withholding tax for foreign tax relief on a self-assessment tax return? In this recent post https://community.hmrc.gov.uk/customerforums/sa/04b8d30e-d6a8-ee11-a81c-002248c69e85 the HMRC admin says this is possible, and tells the user to use the SA106 and claim the tax without reporting dividend income and give evidence the dividends occurred in an ISA. In this other recent post https://community.hmrc.gov.uk/customerforums/sa/d13c5566-be19-ef11-a81c-000d3a870502 an HMRC admin says in answer to roughly the same question that no tax relief is allowed on your UK self assessment return because the dividends in the ISA were not taxed in the UK. Is it possible to claim foreign tax relief for foreign withholding taxes on dividends in an ISA?
Posted Mon, 15 Jul 2024 13:44:43 GMT by HMRC Admin 10 Response
Hi
No.  Foreign tax credits are credit of tax paid overseas that is set against UK tax.  Where there is no UK tax to pay, then there is nothing for a foreign tax credit to be set againsts, so no relief is due.

Amended response
No, if you are a UK resident you do not have to declare or tell us about any income or capital gains from ISA Savings and investments, including dividend income, you can see the guidance here:
SAIM2310 - Interest: exemptions: tax-free savings income: ISAs, PEPs and CTFs

You will need to approach the Canadian government direct regarding any claim against the withholding tax they have deducted on your ISA dividends. They may request you to obtain a certificate of residence from us verifying you are a resident in the UK for tax purposes. If they do, you can apply for a certificate of residence here:
How to apply for a certificate of residence to claim tax relief abroad
Thank you.



 

You must be signed in to post in this forum.