Foreign dividends

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

Overseas dividends are those received from companies not resident in the UK. ‘Dividends’ includes certain other distributions, see the Cash dividends and Non-cash dividends guidance notes. For the rate of UK tax on taxable dividends, see the Taxation of dividend income guidance note.

For tax purposes, the UK territories of the Isle of Man, Jersey and Guernsey are classed as overseas.

Is it a dividend?

Before determining whether the individual is taxable on the foreign dividend, it is necessary to check that the distribution is, in fact, treated as a dividend for UK tax purposes and is not a capital payment.

In considering whether it is a capital payment, the correct UK tax treatment is found by determining the legal mechanism by which the distribution is made in order to find the character of the payment under the corporate law of the jurisdiction in which the paying company is incorporated.

For example, in Beard, the Upper Tribunal found that a distribution from a Jersey company derived from its share premium account was a dividend and not a capital

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Personal Tax

Interest and penalties on late paid tax under self assessment

Interest and penalties on late paid tax under self assessmentInterestIf the capital gains tax, the balancing payment or payments on account of tax and / or Class 4 national insurance contributions (NIC) are paid late, HMRC will charge interest on the amount overdue from the original due date. The

14 Jul 2020 12:00 | Produced by Tolley Read more

Corporation Tax

Entity classification

Entity classificationImplications of entity classificationIf a subsidiary is established, it is important to determine how it will be treated for UK tax purposes as this will determine the basis on which it is taxed. A subsidiary may either be transparent (like a partnership, where the individual

14 Jul 2020 11:37 | Produced by Tolley Read more

Owner-Managed Businesses

Capital allowances on cars

Capital allowances on carsSummary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions of 50g/km and below 18%CAA 2001, s 104AASecondhand cars with CO2

14 Jul 2020 11:08 | Produced by Tolley Read more

Autumn Budget 2024

��˾��ҹ��