Dividend Withholding Tax

Hi, can you please tell me if I need to include the witholding tax when declaring my dividends on a tax return or do I just use the amount payable ? Thank you

Hi

You will declare it as part of the foreign income and if UK tax is also due you can claim relief for the foreign tax paid, please see - Tax on foreign income

Thank you

Thanks for the reply. I have noticed the foreign section is a paper copy and not available to fill out online. The witholding tax is for £1.85 and is from a Santander dividend only. Can I not fill out the foreign dividend section for this ? if not what do I do ? thank you

Hi Puddle Splash,
The foreign section is available online, you need to tailor your return at section 3 to say "yes" to having foreign income and you want to claim Foreign Tax Credit Relief,
Thank you. 

Just to be sure, when I add together my foreign dividends, do I add the amount payable plus the withholding tax, or is it just the amount payable ? Thank you

Hi,

You would use the gross figure for dividends, which is the net figure plus witholding tax on SA106. Column D is the witholding tax Column E is to claim foreign tax credit relief and colum F is the gross figure.  

Have a look a the note for box 5 on page FN6.  

Foreign notes (2022-23)

Thank you.

Ok, so the dividend net figure amount, will be in the amount payable section after withholding tax has been deducted, is that correct ? thank you

Hi Puddle Splash,
That is correct.
Thank you.

Hi, I have been paying WHT on dividends (NL) for years with no clear way of reclaiming it. I assumed (wrongly it seems) that this was taken into account when I completed my SA forms and the tax calculated...can you point me in the right direction of info for this...in laymans terms not the overly wordy and complicated tax specialist pages. Secondly, I am looking at buying shares in BHPB on the LSE but it is an Australian company listed on multiple exchanges. Is div WHT applicable in this case - if so I think I might just steer clear. Many thanks, 

Name removed admin 

Hi steveML,
You would need to amend your tax returns to claim a Foreign Tax Credit Relief.
As we are now in a new tax year, you can only amend tax returns for 2022 to 2023 and 2023 to 2024.
For tax years 2020 to 2021 and 2021 to 2022, you will need to submit an overpayment relief claim, in writing.
You will need to follow the guidlines here to make your claim:
SACM12150 - Overpayment relief: Form of claims
We regret that it is now too late to claim for tax years 2019 to 2020 and earlier, as they are now out of date for repayment purposes.
Thank you. 

Re: Luxembourg withholding tax on dividends On 19th July 2023 the Luxembourg Parliament ratified the updated UK-Luxembourg Double Taxation Agreement, whereby Withholding Tax on interest, royalties and dividends was reduced to 0%, other than for REIT Property Income Distributions which the treaty reduces to 15%. With the UK government having already ratified the new treaty, this change was applied from 1 January 2024. However, the dividends in B&M European Value Retail SA that were paid to me on 12th February 2024 and 5th August 2024 have both continued to be paid net of 15% tax. Correct me if I am wrong, but I assumed that from 1st January 2024 dividends in Luxembourg listed companies would be paid gross to UK beneficiaries, and any dividend tax due would be paid at UK dividend rates and calculated in our tax returns. Am I able to reclaim the 15% tax on these dividends, as my taxable income is less than the personal allowance, and is there any way to have the B&M dividends paid gross in the future? Many thanks.

Dear HMRC, I am currently preparing my tax return for the year 2024 and would appreciate some guidance regarding how to accurately report foreign dividends received from Hong Kong, which were subject to withholding tax. The details of the dividend are as follows: Original dividend amount: £2,000 Withholding tax paid (10%): £200 Charges deducted: £10 Net dividend received in GBP: £1,790 Based on this, I am uncertain about how to properly input these figures on the foreign dividends section of my tax return. Specifically, I would like to confirm whether the following inputs are correct: Amount of income arising or received before any tax taken off: £2,000 Foreign tax taken off or paid: £200 Special Withholding Tax and any UK tax taken off: £10 To claim foreign tax credit relief: Should I put an 'X' in this box? Could you please confirm if this is the correct way to report these figures, or provide any corrections or additional steps I should follow? Thank you for your assistance. Kind regards, Phy

Hi Julia Marsh,
This is a matter for the Luxembourg authorities.
HMRC will continue to apply the current tax treaty in force, until an updated version is agreed.
Luxembourg: tax treaties
Thank you. 

Hi Phy,
Article 10 of the UK / Hong Kong tax treaty:
https://assets.publishing.service.gov.uk/media/5a80481840f0b62302692963/hong-kong-uk-dta_-_in_force.pdf
Allows for you to claim up to 15% foreign tax credit on the tax deducted from the shares.  In the foreign section of your online tax return, you declare the foreign dividend received from Hong Kong (HKG) and the tax deducted from it.  The online return can work out the foreign tax credit for you.

 

Thank you for your reply. My point is that surely the current tax treaty in force is the version that has been applied from 1st January 2024, which states that Withholding Tax on dividends, other than that derived from immovable property or REITs, has been reduced to 0%. My dividends are not from immovable property or REITs and yet 15% is still being deducted. I do not see how this is correct - see below:- https://www.gov.uk/government/publications/luxembourg-tax-treaties/uk-luxembourg-double-taxation-convention-and-protocol-not-in-force Article 10: Dividends Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. However, dividends paid by a company which is a resident of a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State: a) except as provided in sub-paragraph b), such dividends shall be exempt from tax in the Contracting State of which the company paying the dividends is a resident; Sub paragraph b) does not apply since it only relates to income derived from immovable property or REITs, which my dividends are not.

Hi,
As the dividends in question are paid by Luxembourg, you would need to take the matter up with them as to why they have not used the new rules.
Thank you.