Self assessment tax return - help with foreign pages

itwasntme001

Hi,

Just doing my SA online and have filled everything in but when looking through the tax return (the finalised document that HMRC sees), it seems to be missing the foreign dividend amount I received for last tax year.  I selected that I receive foreign dividends.  Then got to the page where it asked to enter the foreign dividends in pounds (I filled in both gross figure and optional tax taken figure, in pounds).  I did not select that I want the foreign tax relief as my dividends total (domestic and foreign) are still less than the dividend allowance so would not be eligible for any relief.  The online form did not ask for any breakdown of the foreign dividends I received.

So no where on the tax return does it state the total foreign dividends I had entered.  And of course does not show it in the foreign dividend break down as the online form did not ask for this.

Is this fine as it is?  It wouldn't make any difference to the tax I owe in the end, its just that the foreign dividend figure is completely missing so worried HMRC may question this.

Thanks

itwasntme001

Anyone had any experience with this?

Shedman

For foreign income (incl dividends over £300) my understanding is that you have to fill in supplemental form SA106, which is where the details of the foreign income is set out.  But as HMRC doesn't have SA106 available to submit as an online form as part of the online self assessment submission, it appears to me that you have to submit the completed SA106 as a PDF attachment in the Attachments section at the end of the online SA ....unless you use a commercial tax package that allows online submission of the SA100 and the supplemental forms such as SA106.  

Cheapest I've come across to do this is a spreadsheet based product called SA2000 from Quality Management Software Ltd for £12.99.  You can download and complete it and print it out without paying but you need to buy a token to submit it online.  It's quite a 'functional' (ie not pretty) product but does seem to do the calcs OK from my testing of it.

Edit:  I would caveat to say that it isn't totally clear to me whether, if you submit an online SA and complete the Foreign income sections, that it is actually necessary to submit the supplemental pages such as SA106  or whether they are only needed if you do a paper submission for self assessment.  I've read conflicting views when I've tried looking into it.  I can't see that it creates a problem though if it is attached as I suggested.

EthicsGradient

In my online tax calculation, it has a line "Dividends from foreign companies", above the "Interest from UK banks, building societies and securities etc" line (while "Dividends from UK companies" is below the interest line). When added together, they form the total under "Dividends from companies etc" lower down.

Shedman

EthicsGradient said:

In my online tax calculation, it has a line "Dividends from foreign companies", above the "Interest from UK banks, building societies and securities etc" line (while "Dividends from UK companies" is below the interest line). When added together, they form the total under "Dividends from companies etc" lower down.

Further to my previous answer and having just looked at the online SA again, as it's a couple of months since I looked at it last, it now looks to me as if the detailed information about foreign dividends can be added in the Foreign section and putting in some dummy data I also like EthicsGradient get the Dividends from Foreign Companies showing on the details online calculation.

 it seems that up you can put the details of each dividend in individually (ie Reference, Country, Amount, Tax deducted etc) then click Add at the bottom and then fill in the details of the next dividend and click Add and so on.  However It's important on the final one to click Add so a blank form appears but not fill in anything and then click Next otherwise it doesn't take the final entry.  If you look at the bottom of the screen it should list the entries and the total. 

If you had perhaps just completed one lot of the details (ie you put them all in in total rathervindividually) but neglected to click Add as you didn't want to add a further entry then maybe that's why the foreign dividends weren't picked up and carried forward into the tax calculation?

From this I think I've changed my view that a separate SA106 needs to be submitted as well.

dales1

I think you might have missed ticking a box somewhere, about Foreign forms attached.

Mine is OK.

Pages F1 - F3 of my online tax return, give my details.

Dales.

sausage_time

Agree with the above, you may have neglected to press Add when adding the final details.   I see my details on pages F1-F6 of the generated PDF.

itwasntme001

Thanks for all your help.  It appears you were correct Shedman - I did not click the "Add" button which is why the foreign dividends did not appear on the return.

I did aggregate all the foreign dividends into one (they are all US dividends).  Would this be ok or do I really need to split them up by the individual companies paying the dividends?

Also, I received dividends from Lindsell Train GE which falls under "foreign dividend" (presumably because the fund is in Ireland?) in the dividend summary document provided by my broker.  I entered this in the "OEIC" dividend section.  Is this ok or do I need to enter it into foreign?

bowlhead99

itwasntme001 said:

I did aggregate all the foreign dividends into one (they are all US dividends).  Would this be ok or do I really need to split them up by the individual companies paying the dividends?

You can put them all under one and lump them under USA on the Foreign pages, as you'll have the same withholding tax rate on all of them.

Also, I received dividends from Lindsell Train GE which falls under "foreign dividend" (presumably because the fund is in Ireland?) in the dividend summary document provided by my broker.  I entered this in the "OEIC" dividend section.  Is this ok or do I need to enter it into foreign?

Stick it in foreign as it is an Irish dividends which is why your broker put it on your statement as foreign dividend. If your foreign dividends are over £300 you should fill out the foreign sections to say what you had from what country and what foreign tax was deducted along the way (there would be some for the US divs but not for the LT divs).

itwasntme001

Thanks a lot Bowlhead99, that is very helpful.

One final question.  The only part of the foreign pages I am not so sure about is whether to and what to enter for the tax.  There is "Foreign tax" and there is "Special Withholding Tax".  Do I enter the 15% tax paid for the US shares in the former or later section?  Obviously, as you say, I would enter nothing for both for Lindsell Train.  Also, since I am within the dividends allowance, there would be no need to apply for any foreign tax credit relief I believe.

bowlhead99

itwasntme001 said:

Thanks a lot Bowlhead99, that is very helpful.

One final question.  The only part of the foreign pages I am not so sure about is whether to and what to enter for the tax.  There is "Foreign tax" and there is "Special Withholding Tax".  Do I enter the 15% tax paid for the US shares in the former or later section?  Obviously, as you say, I would enter nothing for both for Lindsell Train.  Also, since I am within the dividends allowance, there would be no need to apply for any foreign tax credit relief I believe.

Assuming you're just a normal UK resident and citizen, and have never been non-UK domiciled using the special 'remittance basis of taxation', then 'Special Withholding Tax' isn't something that could be relevant to you.  Your 15% US tax that was taken at source will go in the "Foreign Tax taken off or paid" box. (column C on the paper version of the form). Even if they deducted 30% you should only put 15% here because that's the most you should have paid under the tax treaty.

The two ways to relieve the foreign tax are:
a) Foreign tax credit relief. For that you would tick the box to say you want to claim FTCR for the foreign tax paid; they calculate your normal UK tax on your income with and without the gross $100 foreign income, and allow you to claim the lesser of foreign tax paid (GBP equivalent of $15) and the UK tax due (£x).
b) Just deduct the $15 from the $100 to leave $85 of foreign income and pay full UK tax on that $85.

You can have whichever method gets you the best result; but in your case if all the gross income is within the dividend allowance and earning the income doesn't cause you to lose any other allowances (e.g. loss of personal allowance, reduction of personal savings allowance, child benefit clawback etc) and you don't have anything complicated in your tax returns then there is no real need to put in a claim because the foreign income didn't give you a tax liability anyway. If your UK tax this year is going to be exactly the same with or without the US dividends, no worries.