Tax on Dividends

by **ny_rk** on Tue Jan 24, 2012 11:30 am

Hi

I'm completing my self assessment and I'm trying to understand what to do about my dividend payment last tax year. I work in the UK for a swiss company and received dividends in swiss francs that was converted to pounds. I think withholding tax was also applied. How do I declare this in my return?

Any help appeciated

by **Chanmuganathan** on Tue Jan 24, 2012 3:17 pm

Tax deduction available to you is the lower of UK income tax on the gross dividend and the foreign tax suffered. As far I know Swiss withholding tax percentage is 35% therefore you could only recover the UK income tax and cannot recover some of withholding tax you suffered.

But there is another choice is you claim 15% (Different percentage for different countries) in UK and claim back the rest of 20% from Swiss authorities. I hope someone with better knowledge answer will explain this.

by **Chanmuganathan** on Tue Jan 24, 2012 3:19 pm

Tax deduction available to you is the lower of UK income tax on gross dividend and the foreign tax suffered. As far I know Swiss withholding tax percentage is 35% therefore you cannot recover some of your withholding tax suffered.

But there is another choice is you claim 15% (Different percentage for different countries) in UK and claim back the rest of 20% from Swiss authorities. I hope someone with better knowledge will explain this.

by **maths** on Tue Jan 24, 2012 8:14 pm

Only sterling amounts can be entered on the tax return.

Re a dividend, the amount in foreign currency at the date the dividend arises (broadly the day it is declared to be paid) should be converted into £; the w/tax converted on the day it is levied.

It is the gross dividend in £ which is subject to UK income tax less credit for the Swiss tax paid on it (eg the w/tax). However, the rate of w/tax applied is that applicable under the UK/Swiss DTA and thus the 35% non-treaty rate cannot be claimed as the rate under the DTA is less.

If 35% was withheld the excess over the DTA rate needs to be claimed back from the Swiss tax authorities.