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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: 2965
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: 2965
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: 190
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.


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