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Posted Sun, 14 Apr 2024 13:55:15 GMT by Chung Kin Cheung
1. Is it correct to report Dividends from a foreign REITs under the section "Income from land and property abroad" in Form SA106? 2. In Form SA106, I reported foreign tax taken off for dividends from a US company (GBP 270, 15% of total dividends) and a REITs in US (GBP 457, also 15% of total dividends). The total amount I claim for the foreign tax is GBP 727. However, the auto calcuation shown that the total foreign tax credit relief is just GBP 615. I think the maximum percentage of foreign tax claim relief for US stock and REITs is 15%. I am in doubt of the foreign tax credit relief amount by auto calculation.
Posted Mon, 22 Apr 2024 14:35:55 GMT by HMRC Admin 5

UK-REITS and NON UK REITS are vehicles that allows an investor to obtain broadly similar returns from their investment, as they would have, had they invested directly in property.  
In the hands of the shareholder, the profits paid out are known as property income distributions ir dividends (PIDs) and are taxable in the same way as profits of a UK property rental business.  
Where Non UK REITs are distributed, the profits and foreign tax deducted are declared in the foreign sections under 'income from land and property abroad', where a foreign tax credit can be claimed.  
They are not taxed as dividends, but as property income.  Foreign tax credit relief is restriced in a similar way to dividends.  Article 10 of the UK / USA tax treaty (Uk/USA Double Taxation Agreement - 2002) limits tax relif to 15% (DT19852 - Double Taxation Relief Manual: Guidance by country: United States of America: Treaty summary).

Thank you

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