HMRC Admin 32 Response

Hi,

Article 10(2)(b) of the UK and USA double taxation agreement allows for both countries to tax the dividends and limits Foreign Tax Credit Relief for dividends to a maximum of 15%.  

Uk/USA Double Taxation Agreement - 2002

In the section of the online tax return for foreign dividends, you should enter a reference for the dividends (to help you identify them), the country they are from, the amount of dividend and the tax deducted. The special witholding tax box is for tax deducted under the terms of the European Savings Directive and equivalent third party agreements. This tax will be in addition to any foreign tax deducted by the country of origin of the payment. Please select the rate of 15% and then select yes to the Foreign Tax Credit Relief, only if you want to claim this relief. Click 'add'. Repeat this process until you have entered all of the dividends. You should complete all of the tax return before viewing your calculation. Take a note of the tax due on your dividends. The FTCR is up to a maximum of 15% of the tax deducted in the USA.

Thank you.

Hi,

You do not enter the adjusted income figure on the return. It is calculated based on the information you enter on the return. When completing the tailor your return section, you need to answer yes to the question which asks if you made pension contributions.

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Hi,

The main effect for UK investors who have invested in non-reporting funds, as opposed to reporting funds, is that on disposal of their interests they will be liable to tax on any gain arising as if it were income (that is, an offshore income gain, or ‘OIG’) instead of as a capital gain.  

IFM12300 - Offshore Funds: introduction: non-reporting funds

There are certain exeptions to this. Further guidance can be found here:

IFM13400 - Offshore Funds: participants in offshore funds: the charge to tax on disposal of an interest in a non-reporting fund

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Hi,

It will be declared as Capital Gains. As you will also need to show this on the Capital Gains page, this will then be covered by the annual allowance so no extra charge will be applied.

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Hi,

The interest needs to be declared in the tax year it is earned even if automatically put back into the account.

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Hi,

If you qualify for split year then you only report any foreign income for the UK part of the year.

RDRM12000 - Residence: The SRT: Split year treatment

If you do not qualify then you will need to report all your foreign income to the UK.

Tax on foreign income

The guidance at RDRM12150 at GOV.UK will help you work out if split year treatment applies. 

Thank you.

Hi,

Apologies if you are having issues getting through to us to review the code. Unfortunately we can't view your tax code on this forum and you will need to contact our Income Tax team again.

Income Tax: general enquiries

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Hi,

You will need need to review the guidance at RDR1 and apply the tests at RDR3, to determine your residence status. If you are deemed resident for the full tax year, then you will need to convert your Hong Kong earnings and tax deducted into pounds sterling and declare on a Self Assessment tax return. If split year treatment applies, you would only declare your UK income from your date of arrival.  

Residence, domicile and the remittance basis: RDR1

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Hi,

You can choose to use the remittance basis or the arising basis. You would need to work out which is more beneficial to use.

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Hi,

The foreign tax credit would apply if tax was in fact due as the credit would then reduce your bill. You can claim if for a maximum of 10 years from when it is first exercised.

Thank you.