This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

When do I declare US dividends as income

gat
Posts:2
Joined:Sat Dec 15, 2018 4:58 pm
When do I declare US dividends as income

Postby gat » Sat Dec 15, 2018 5:07 pm

I have an account (Fidelity) in the US which holds my US shares and dividends. I am resident in UK. When I fill in my UK self assessment I usually declare the dividends as foreign income and calculate the total amount received during the last tax year using the US/UK exchange rate.
However, I am beginning to wonder whether this is correct. Do I have to declare the dividends as foreign income even though I have not yet transferred the dividends into a UK account. In other words do I pay UK tax when I am paid the dividend in the US or only when I transfer the dividend from the US account to the UK ?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: When do I declare US dividends as income

Postby bd6759 » Sun Dec 16, 2018 12:50 am

What you are doing is correct. Don't change it.

gat
Posts:2
Joined:Sat Dec 15, 2018 4:58 pm

Re: When do I declare US dividends as income

Postby gat » Sun Dec 16, 2018 10:11 am

So declaring it as foreign income, even though I have not yet transferred the dividends into a UK account is correct?
Does the same apply to US shares? If i were to sell them then the funds would reside in the US account and I would have to declare it as foreign income even thought I have not brought the proceeds into the UK yet?
I have looked on the web and cannot find anywhere that clarifies this.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: When do I declare US dividends as income

Postby bd6759 » Sun Dec 16, 2018 12:31 pm

Yes. (s403(1) Income Tax (Trading and Other Income Act) 2005)

Yes. (s1(1) Taxation of Chargeable Gains Act 1992)

DavidTreitel
Posts:271
Joined:Thu Aug 16, 2012 4:31 pm

Re: When do I declare US dividends as income

Postby DavidTreitel » Sun Dec 16, 2018 12:41 pm

Assuming you are either domiciled in the UK, deemed domiciled in the UK or taxable on the arising basis; you are calculating things correctly.

You are entitled to claim double tax relief up to 15% tax on US source dividends. Do remember if you own any US mutual funds to report capital gains distributions to HMRC and to treat any capital gains on non-UK reporting funds as taxable offshore income gains.


Return to “Income Tax”