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Posted Thu, 27 Apr 2023 11:43:09 GMT by Paul Whitaker
I own HSBC shares through the HK registry and my dividends are paid to my account in HK. The dividend I received in 2022/23 was in excess of £2,000 but below £10,000. HMRC’s tax guidance is that there are two types of dividend reportable:- A) If the dividend is from foreign companies and exceeds £2,000. B) If the dividend is from UK companies and exceeds £10,000. There is no option for UK companies who pay dividends through a foreign registry. My layman's belief is that HSBC Holdings pays the dividend out from an, after tax, central pot even if via an overseas subsidiary and whilst the IRD HK will not take tax on the dividend they will report it to the UK authorities under the CRS agreement. HMRC were unable to clarify where it should be reported and I only have to complete a return if, in this case, HSBC are treated as a foreign company. Any thoughts on whether it is reportable or not?
Posted Thu, 04 May 2023 14:49:43 GMT by HMRC Admin 5

If the total of foreign dividends and UK dividends, exceed the dividend allowance for the tax year, they are required to be reported in a self assessment tax return.  

If the foreign dividend exceeds £2000.00, then the dividend should be reported in SA106, including any tax deducted.  

You may be able to claim a foreign tax credit relief, for an element of the tax deducted in the other country.  

You will need to look at the double taxation agreement in force, to help calculate the relief due in the guidance here

Tax treaties

Thank you.
Posted Thu, 04 May 2023 21:41:46 GMT by Paul Whitaker
The question is less about tax credit relief and dividend allowances but more about the definition of a foreign company. For the purpose of declaring the dividend in SA106 Does HMRC deem HSBC to be a foreign company when they pay dividends overseas and a UK company when they pay dividends in the UK OR does HMRC consider that HSBC is a UK company no matter where the dividend is paid OR are the guideline notes for the self assessment template in need of a re-write because using only the words foreign and UK to define a company does not reflect UK companies that are listed on foreign exchanges.
Posted Wed, 10 May 2023 14:47:03 GMT by HMRC Admin 5

UK dividends are those received from companies resident in the UK.  

Where the company is non resident in the UK, then this can be considered a foreign dividend.

Thank you.

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