Foreign dividends (taxed) below £2000

Im unsure whether I have to declare dividends received from my foreign stock account in the income section - the net amount for 21/22 was only about £240 after approx £40 foreign withholding tax was taken off. I have not touched or withdrawn any money from the broker account. Is there any benefit and need to declaring net and tax amount under the following sections? 6. Foreign dividends (up to £2,000) - the amount in sterling after foreign tax was taken off. Do not include this amount in the Foreign pages: 7. Tax taken off foreign dividends. Enter the sterling equivalent:

Just to be clear - I have not remitted the dividends to UK, they are still in the US broker account. These are the answers I gave but unsure whether to include it as its a) already taxed and b) not actually part of my UK income. 6. Foreign dividends (up to £2,000) - the amount in sterling after foreign tax was taken off. Do not include this amount in the Foreign pages: GBP 240 7. Tax taken off foreign dividends. Enter the sterling equivalent: GBP40

Hi,
 

Based on the information provided, you have correctly declared the dividends received from your foreign stock account :                                                                    How to fill in your tax return (2022)   . Thank you.

Thanks for the reply - I am now more confused than ever. I called up earlier and was advised I needed to complete the Foreign section instead as I have already paid foreign tax on these dividends in the US, and eligible for tax credit relief. If I add them to the income section as above, it actually increases my tax bill - the dividends are treated as additional UK income despite them beig under the 2K dividend allowance. Which is the correct way? If I claim for foreign tax credit relief, how much is that for USA/UK, 15%?

Hi Saz A,

If you are claiming foreign tax credit relief (FTCR), you would enter the gross dividend and the tax deducted on the online return foreign section.  

The double taxation agreement between the UK and USA, allows a maximum FTCR of 15% of the gross dividend as a relief.

 If you fill out your tax return in full, apart from the box for FTCR and review the calculation, you will be able to see how much tax your dividends are generating.

 At this point you can compare 15% of the gross dividend against the dividends tax calculated.  

You can then enter in the FTCR an amount up to the tax being charged, but no more than 15% of the gross foreign dividend and then recalculate.  

Thank you.