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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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2015 tax return, I have dividends from company share

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For 2014-2015 tax return, I have dividends from company share scheme. I was employed in UK but shares are in US company. I paid tax in US. I have declared dividends as foreign income. My returns calculator says I need to pay UK tax on the dividends. It says I can claim foreign tax credit but I dont know basis for that and highest number (25%) is less than tax paid in US.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question..The total of the UK tax credit plus foreign tax credit relief cannot exceed the UK tax chargeable on the dividend.You will find information on Page 3 (Foreign dividends) of HS263 helpful and the link is here (although it covers tax year 2013-14, its principle is same for 2014-15)https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323640/hs263.pdfHere is a link for current year ... look at example 3 and the working sheet (FTCRWS)https://www.gov.uk/government/publications/calculating-foreign-tax-credit-relief-on-income-hs263-self-assessment-helpsheet I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.Please only rate my answer if it is acceptable.
Customer: replied 1 year ago.
Thank you for your reply. I'm nearly there I think. Just a little remaining confusion. I have no UK tax credit. I paid gbp 2930 out of gbp 9765 income from dividends to US IRS (about 25%). Can I claim this as relief from UK HMRC in my return? Links are helpful. HMRC language is a bit opaque I find. Thanks. Mark.
Customer: replied 1 year ago.
.. sorry .. 30% calculator not 'about 25%' .. input error. UK foreign tax relief appears to be capped at 25%
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply...I am attaching a link to reclaiming withholding tax on foreign dividends.https://the-international-investor.com/investment-faq/reclaiming-withholding-tax-foreign-dividendsYour relief from UK HMRC would be limited to tax payable on the dividend income in the UK.I hope this is helpful.
Customer: replied 1 year ago.
I got a second response via email but when I try to open it via the link I get an error message: Sorry, the website www.justanswer.co.ukhttp cannot be found. It looks like address has an 'http' at the end.
Expert:  taxadvisor.uk replied 1 year ago.
Here is a copy of my response in my last posting ....Thank you for your reply...I am attaching a link to reclaiming withholding tax on foreign dividends.https://the-international-investor.com/investment-faq/reclaiming-withholding-tax-foreign-dividendsYour relief from UK HMRC would be limited to tax payable on the dividend income in the UK.I hope this is helpful.
Customer: replied 1 year ago.
so I have paid 30% tax in US and can claim 25% (max) tax relief from HMRC?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.The maximum you can claim is 25%.Please also look at examples 6 and 7 on Page 3 of HS263 I hope this is helpful
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes

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