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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I'm filling in my self assess

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I'm filling in my self assessment tax return and I want to know where I should put my 'overseas scrip dividend' from Vodafone: overseas withholding tax 1034.09 GBP; cash equivalent 9306.78 GBP. Thank you This is how it was summarised in the FT - I think it was called a return of value.

'' xxxxxxxxx will shortly return £54bn to its investors following the disposal of its 45 per cent stake in xxxxxxx xxxxxx The transaction is complex and involves retail investors receiving cash and shares in xxxxxxx xxxxxxxxxxxxxx. There is also a share consolidation. ''

Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.
As this is more than £300 it cannot be filled in on the main self assessment return (Box 5 the section for Interest and Dividends) you will need to show this on a foreign income section.
You do not indicate whether you are filling on the paper version or the online version, but either way it asks whether you had any income from abroad, for which you mark it as "Yes"
Thanks
Sam
Customer: replied 2 years ago.

I'm filing online. When I spoke to a technical officer today on the HMRC SA helpline, she said that because it's a Vodafone matter that an inspector would call me back. I have no faith that I will receive a call-back from HMRC hence my search for advice elsewhere. I received the overseas scrip dividend as part of a return of value as a result of the xxxxxxx / xxxxxxx deal in Feb/March this year.

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
I am sure you will get a call back, its more a question of when rather than if - as the technical team are more reliable that the main contact centre staff at call backs. And the officer you spoke to would have needed to pass through a call back to the technical staff to close down the record following your call.
But I can advise (with certainty)
Its irrelevant how it arose, the fact that its a dividend with a foreign tax credit suffered, it is entered onto the foreign section - as Verizon (the main lead of telephone network in the USA) are the distributor.
(I worked for HMRC for 26 years and have seen this often and most recently when Asda was bought out by Walmart)
So on the online return when you come to tailor your tax return - you mark yes where it asks "If you received any foreign income, do you need to complete the foreign section? "
Then you complete the first question which asks were you not able to transfer some or all of the money to the UK - which you will advise "No"
Then on the next page you check the box "Dividends from foreign companies" and provide the information asked for on the next page pertaining to the country the amount etc
Hope that helps
Thanks
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13707
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Thanks for all your help. Wonderful to know you worked for HMRC and have seen it all before - appreciated your example of Asda/Walmart.

So on the ' Dividends from foreign companies' page

for

'Amount of income arising or received before any tax taken off'

I should put 10,340.87 GBP which is the sum of the cash equivalent

and the overseas withholding tax

For 'foreign tax taken off or paid' I should put 1034.09 GBP

For 'special withholding tax and any UK tax taken off ' I put zero

What do I answer to the question

'Do you wish to claim foreign tax credit relief?'

If the answer is 'yes' then for the next question, what is the percentage?

And finally, do I answer yes or no to the question

Does this dividend qualify for UK dividend tax credits?

This seems to be the end of the relevant page on the SA online return.

Thank you, Felicity

Expert:  Sam replied 2 years ago.
Hi Felicity
Thanks for your further questions (its handy being knowledgeable at both sides of the tax regime!)
Please note, usually as per Just Answer policy, any further assistance sought (over an above the original question) has to be asked for in a new question with new amount offered, or additional services offered. But, as I can see this is your first time on Just Answer, I will assist on this occasion. But it would be appreciated if you do rate the level of service I have provided, as this ensures that Just Answer credit me for my time - Thanks
Lets look at these one at a time
'Amount of income arising or received before any tax taken off'
I should put 10,340.87 GBP which is the sum of the cash equivalent
and the overseas withholding tax
Yes that's right
For 'foreign tax taken off or paid' I should put 1034.09 GBP
Yes that's right
For 'special withholding tax and any UK tax taken off ' I put zero
Correct
What do I answer to the question
'Do you wish to claim foreign tax credit relief?'
You answer YES (or you will not be given credit for the tax suffered - and under the USA/UK double taxation tax treaty you wish to have the tax suffered taken into account with your UK tax position.
If the answer is 'yes' then for the next question, what is the percentage?
This is slightly more tricky, we do have a double taxation agreement with the USA - so basically HMRC will allow you credit up to the equivalent of the UK tax that would have been due (so if the USA tax position is less - then you cannot get a tax refund, but if its more, than you owe HMRC)
But as you have only suffered 10% then you select 10%
And finally, do I answer yes or no to the question
Does this dividend qualify for UK dividend tax credits?
For this one you
You answer Yes
Thanks
Sam
Customer: replied 2 years ago.

Thank you so much for all your help. I will fill in the page with confidence! Felicity

Expert:  Sam replied 2 years ago.
You are very welcome Felicity and happy holidays
Sam

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