Foreign dividend

Hi, "I received dividends in Hong Kong totaling over £2,000 last year, but I did not bring the dividend to the UK. I have some questions regarding tax implications: 1. Do I need to declare this dividend in my tax return? 2. Is it necessary to pay taxes in the UK even if I do not bring the dividend into the country? 3. I came across a quote on your website that says, "If your only foreign income is dividends, you do not need to fill in a tax return." Since my only foreign income is dividends, does that mean I do not need to fill in a tax return in this case?

Hi,

Please refer to guidance at:

Paying tax on the remittance basis (Self Assessment helpsheet HS264)

Thank you.

I'm wondering where on my online self assessment form I should input foreign dividends from Banco Santander. I've received under £20 in dividend payment and withholding tax was about £4. Should it go into page 2, 'Tailor your return section' or somewhere else?

Hi,
If your only foreign income was any interest in box 3 and dividends up to £1,000 and you are claiming deduction relief, put the net amount of foreign dividends, in UK pounds, in box 6.  
Put the foreign tax taken off in box 7.
If your total dividend income, including UK and foreign dividends, is over £1,000 and you are eligible to claim deduction relief or Foreign Tax Credit Relief, do not include the foreign dividend in this box. Complete the ‘Foreign’ pages instead.
Thank you.

If you’ve already paid tax on your foreign income You can usually claim Foreign Tax Credit Relief when you report your overseas income in your tax return. Reporting your foreign income You usually need to fill in a Self Assessment tax return if you’re a UK resident with foreign income or capital gains. But there’s some foreign income that’s taxed differently. You do not need to fill in a tax return if all the following apply: • your only foreign income is dividends • your total dividends - including UK dividends - are less than the £500 dividend allowance • you have no other income to report My total dividend income is more than £5,000, the foreign dividend element (Republic of Ireland) within that figure is less £200. The only way I can get a credit for the £41 tax deducted in Ireland is to complete the tax return is as follows, having entered the source country - IRL 1 - Amount of income arising or received before any tax taken off - £163.00 2 - Foreign tax taken off or paid (optional) – ignored 3 - Special Withholding Tax and any UK tax taken off (optional) - £41.00 4 - Do you wish to claim foreign tax credit relief? – no I have tried to put the £41 in at stage 2 and answered yes to 4, but am met with a list of percentages which don’t get the desired result. Am I doing it right?

Hi
You will need to declare this on a self assessment tax return so that you can claim a foreign tax credit.  There is no other way to claim this.  With dividends it is less straight forward to calculate the FTCR.  Article 11(1)(b) of the UK / Ireland limits tax relief to 15%.  This is the percentate you use. UK/IRELAND INCOME AND CAPITAL GAINS TAX CONVENTION

I have now updated my return (90% complete), but not yet submitted it. Having entered the source country – IRL it now reads: 1 - Amount of income arising or received before any tax taken off - £163.00 2 - Foreign tax taken off or paid (optional) – £41.00 3 - Special Withholding Tax and any UK tax taken off (optional) 4 - Do you wish to claim foreign tax credit relief? – yes 5 - Rate of tax allowed: - 15% Once you get passed the ‘View your calculation page’ it comes up with a ‘Foreign tax credit figure against UK IT’ and, based, on the above information, it come up with a figure of £15.00. I cannot see how that figure is arrived, I was expecting to see a figure based around £24.45 (163.00 x 15%). Nevertheless, I was given the option of either using the £15.00 figure or calculating the figure myself. Going for the latter option, three ‘next’ clicks later I was then able to put in the figure of £24.45 which was rounded up to £25.00. I have three questions: Have I now got the right amount of tax relief? If I have got it right, surely the system has enough information, the £163.00 and 15%, to calculate the correct amount of tax relief without asking to customer to do it? Possible upgrade (with)? The UK/Ireland Tax Treaty says, in Article 11, there are two applicable rates – 5% and 15%. It would be easier if having selected IRL beforehand, only these options were available to select. Possible upgrade, although I appreciate there is a lot more work here as would have to it for every country with whom the UK has a Tax Treaty.

Hi ,
 

The tax credit is restricted the the rate applied by both countries but this is the maximum that can be ghiven. Full relief is not always due as it depends on the amount of UK tax that is due on the same source. Further guidance is available at : Relief for foreign tax paid (Self Assessment helpsheet HS263)   . Thank you .