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bigduckontax, Accountant
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UK Income Tax - Tax Calculation by HMRC In my Tax Return for

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UK Income Tax - Tax Calculation by HMRCIn my Tax Return for 2018-2019 I declared GBP 16,583 in Foreign Dividends and GBP 8,863 in UK Dividends. Added together this is GBP 25,446 dividend income. From the foreign dividends 15% foreign dividend tax or GBP 2,487 was deducted which I also declared on HMRC’s “Foreign” Form, Page F2, column C.Because of my other income HMRC calculated the tax on my dividend income as follows:Higher rate band at nil rate for GBP 2,000 x % = 0
Higher rate for GBP 23,446 x 32.5% = 7,619.95but did not give me any Foreign Tax Credit Relieve (FTCR).Can you think of a plausible explanation for this or is this implausible?

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

From whence did these dividends originate?

Customer: replied 7 months ago.
They were all paid and received during the UK tax year 2018-2019. The foreign dividends came from German corporations.

Under the Double Taxation Convention between the UK and Germany the tax deducted by Germany is allowed as a tax credit against your UK liability on the same income stream. Assuming that you claimed these deductions one must assume that you return was dealt with by an operative with very little or no knowledge of double taxation.

Customer: replied 7 months ago.
Thank you very much for your assessment. I think this is the most likely explanation and will write to HMRC to have them explain why no Foreign Tax Credit Relief was deducted from their tax calculation. Kind regards.

Exactly, assuming that you did declare the tax deducted then HMRC have, as usual, failed to take account of the tax credit in the hope that the taxpayer will not notice discrepancy..

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