Paola15

Hello and thank you for your answer. For this year's Self Assessment, I see in the Foreign section, when entering the dividends details, there are two fields for entering the foreign tax paid (in my case, US Federal tax): - One is the “Special Withholding Tax and any UK tax taken off”, and if I fill this field with the amount of US tax I paid, I can see this is subtracted from the total tax amount I owe in the final calculation, classified in the “Tax deducted” part as “Foreign income”, and in this case the Self Assessment says I can claim £0 relief. - The second way to enter the foreign tax I paid is the "Foreign tax" field. If I use this one instead of the "Special withholding tax" then I have to tick the "I want to claim Foreign Tax Credit Relief" to have the value subtracted from the total I owe, and in this case in the final calculation this amount shows up as "Foreign Tax Credit Relief". I imagine the correct one to use in my case is the latter, the "Foreign tax" field, but given that by using the Special Withholding tax field the amount is automatically deducted, may I ask what is the difference between the two? Thank you.

Hello, I am a UK resident and tax payer.
I hold shares of an American company, for which I receive dividends (>£2000 in a tax year). These dividends are paid as cash into my brokerage account, based in the US and in USD. I have never transferred this money into my UK bank account, neither re-invested them (for example for purchasing more shares). So far I have declared these dividends when filling the Self Assessment as foreign income, in the section specific for Income from overseas sources (Dividends from foreign companies). Before getting into my brokerage account, a US Federal tax of 15% is withheld. I have the following questions: Question 1. Do dividends that are neither invested nor transferred to a UK account count as income? Am I supposed to declare them in the Self Assessment and pay income tax on them? If I decide to reinvest them directly from the brokerage account, are they still considered as income and taxed at the income tax rates? Question 2.
 Assuming the answer to question 1 is that foreign dividends, in my circumstances as described above, are taxed as income. In all my self assessments, the foreign dividends I’ve declared have been taxed at the higher rate (32.5%). I just found out about the tax relief claim thanks to the Double Taxation Treaties between the UK and the US. Is it correct I can claim Foreign Tax Credit Relief on income from foreign dividends? If so, can I claim a refund of what I paid extra for the past years? Question 3. Am I correct that I can claim 15% of the US tax I paid and therefore I should just enter 15% in the appropriate field when filling the Self Assessment?