Foreign Dividend Taxation

Hello, I am going to be receiving dividends from a Wyoming based LLC in the USA. My usual income is usually up to the lower rate limit of £50,270 (salary/UK dividend mix). What will my dividends from the US based company be taxed at here in the UK? Thank you

Hi 

As you are in receipt of foreign income, you will need to declare it in a self assessment tax return, in the foreign section,
If you are required to pay tax on the dividends in the USA.  The UK/USA tax treaty allows you to claim a foreign tax credit of up to 15% of the foreign tax paid.  
Please have a look at article 10 regarding dividends at  Uk/USA Double Taxation Agreement - 2002
If you are not already registered for self assessment, you can do this at Check how to register for Self Assessment.

Thank you

Query relates to USA dividends paid into a UK Stocks and Shares ISA after 15% US tax deduction. Can the 15% USA withheld tax be claimed in the same way as if the USA dividends were paid to the owner directly as opposed into a UK Shares ISA?

Hi,

Not if the shares are placed in the ISA, as the dividend is not taxable, so no tax to set the withheld tax against.

Thank you.

Thank you for your response. The USA withhold the 15% tax before they pay the remainder into my UK Stocks and Shares ISA account. Can this 15% USA withheld tax be claimed through my Self Assessment and pay the UK Tax due as I have other US dividends paid to me directly (not in an ISA) and I currently claim the 15% USA withholding tax under the Double Tax Treaty ? Thank you

Hi
You cannot claim relief for the tax deducted on the ISA dividends. Foreign tax credit relief is only applicable for the source it is actually taken from so you can only calim relief if tax is deducted from the other dividends that you report.

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.