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  • RE: FTCR on dividends

    Thank you for the reply. As this is an old 20/21 return, it is now not possible to enter on-line so we have to calculate manually. After following all of the guidelines, worked examples etc I am still not clear whether the FTCR can be applied to the total of foreign tax payable or only to the amount over the £2000 allowance Thank you
  • RE: FTCR on dividends

    After very many hours I am still struggling to understand the figures that I should use and HMRC worked examples don't fully help me make the correct calculation. For this year only I am a higher rate tax payer with a dividend rate of 33.75%. Could someone please indicate the correct method or, are both allowable? There are foreign dividends of £2100 gross, £1600 net. The net amount is lower than expected as 25% was deducted from most of the payments because of incorrectly completed USA IBAN forms. (There are also UK dividends of £100 which are ignored for the simplified calculations below) Method 1: Declare the dividend amount received £1600 net with ‘Deduction Relief’. This is below £2000 annual dividend allowance - so no additional tax due. This also reduces total annual income over method 2. My annual income is just over £100,000, so the impact on basic allowance reductions is less than method 2. Method 2: Declare £2100. Tax due £100 x 33.75% = £33.75. FTCR is £315, so no additional tax due (but the £2100 takes me further over £100,000) Do both methods and calculations look correct? Presumably ‘deduction relief’ can be used on dividends? Thank you
  • FTCR on dividends

    I have to recalculate the tax due for an earlier year. I have done extensive searches but cannot establish exactly how I need to calculate manually calculate the tax due, including the FTCR. The year is 2020/21. In this year I received substantial amounts of Foreign interest which took me to 40% tax rate. My foreign dividends were £2100, (15% USA withholding tax paid) and UK dividends were £100. None of the calculations I can find online, including the HMRC, seem to take account of the £2000 allowance and so suggest that FTCR of £2100 x 15% = £315 can be deducted from the very substantial overall tax bill for this year. Is this correct?