Skip to main content

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

Posted Tue, 04 Jun 2024 11:08:56 GMT by john2938
I am a US citizen living in UK and therefore subject to both US and UK tax. I receive various items of US income such as dividends and IRA distributions. The US tax year is the calendar. Thus, the US tax year 2023, for example, spans the UK tax years 2022-23 and 2023-24. I understand from various posts on this Customer Forum that when reporting my US income for US tax year 2023 to HMRC I do not need to allocate the income proportionally to the UK tax years 2022-23 and 2023-24 but I can use the same income amounts as in my 2023 US tax return (converted to GBP) and report it all in my 2023-24 UK tax return. Is this correct? Please correct me if it is wrong. Assuming that the practice described in the previous paragraph is acceptable, does the same principle apply to a claim for foreign tax credit relief? Specifically, if I receive dividend income of $X in 2023 and am assessed US tax of $Y for that income, can I use these amounts (converted to GBP) in a claim for foreign tax relief included in my 2023-24 UK tax return, instead of allocating them proportionally to my 2022-23 and 2023-24 tax returns?
Posted Thu, 06 Jun 2024 13:52:01 GMT by HMRC Admin 5

You are correct.  For your convenience, you simply take the income arising in the USA calendar year and apply that figure to the UK financial year.  
For example, if you had £20000 income from 1/01/23 to 31/12/23 in the USA  You would declare £20000 in the 2023 to 2024 tax year, as the end date 31/12/23, falls in the tax year ending 5 April 2024.

Thank you
Posted Sun, 09 Jun 2024 06:32:09 GMT by john2938
Thank you for this clarification. But what about the supplementary question regarding foreign tax credit relief? If I pay US tax on US income of $20000 received from 1 January 2023 to 31 December 2023 and I wish to declare that income and claim foreign tax credit relief, is that all done in my self-assessment return for 2023-24, regardless of when the US tax is actually paid?
Posted Wed, 12 Jun 2024 13:42:20 GMT by HMRC Admin 10
You can put in an estimate for the tax credit relief if not already paid and then make an amendment once the actual figure is known.
Posted Fri, 05 Jul 2024 11:11:09 GMT by john2938
I infer from HMRC Admin 5's post in this string that if I had £1000 US income each month in calendar year 2022 and £2000 US income each month in calendar year 2023, I would declare £12000 foreign income in the 2022-23 UK tax year and £24000 foreign income in the 2023-24 UK tax year. I spoke to an accountant who is dubious about this, so can you refer me to the relevant provision in the self-assessment manuals?
Posted Thu, 11 Jul 2024 13:27:29 GMT by HMRC Admin 32

As previously stated for convenience of the income and working out the foreign tax credit, you will use the US calander year income to report it in the UK.

Thank you.
Posted Sun, 14 Jul 2024 19:48:11 GMT by john2938
Thank you for this advice regarding the way to proceed for US income and foreign tax credit. Not being aware of this advice when I completed my UK self assessment return for 2022-23 I declared the US income that I received during the period 6 April 2022 to 5 April 2023, that is during the entire UK tax year 2022-23. I plan to follow this advice when completing my UK tax return for 2023-24. But what US income should I declare in my UK return for 2023-24? I've already declared my US income for 1 January 2023 to 5 April 2023 in my UK return for 2022-23 and I don't want to declare it again, and be taxed on it again. Can I omit my US income received from 1 January 2023 to 5 April 2023 and provide an explanation?

You must be signed in to post in this forum.