Tax on dividends

John464

I have some ETFs outside an ISA, and dividends over my allowance.
So am doing a self assessment
Does it make any difference to the dividend tax in UK with the ETFs (Vanguard and Ishares) being domiciled in Eire please?

bowlhead99

The UK rates of tax are the same whether the dividends are UK dividends or foreign. But as they are foreign dividends you should use the foreign pages (unless they are small amounts under £300 where you're allowed to just stick them in the same place as your UK dividends).
When you use the foreign pages you would just aggregate all your Irish dividends received (or undistributed excess income that's deemed received) onto one line for Ireland, and have a separate line for income for each other country (e.g. if you have some ETFs in Luxembourg, some individual shares from another country etc)

John464

Thanks bowlhead99
Does anyone know what rate we should use to convert the $ dividends to pounds please?
I googled it, but then discovered HMRC publish their own conversion tables
BUT - they give a monthly average, and yearly average
https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2018-monthly
and I can't see which one to use?

bowlhead99

John464 said:

Thanks bowlhead99
Does anyone know what rate we should use to convert the $ dividends to pounds please?
I googled it, but then discovered HMRC publish their own conversion tables
BUT - they give a monthly average, and yearly average
https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2018-monthly
and I can't see which one to use?

You can just use the HMRC monthly rate which covers the day of the transaction. Large businesses will generally do their corporate accounting with monthly rates because they will have thousands or even millions of transactions in a month.

Whereas when you are simply trying to record a bit of income from a small number of dividend paying funds, it is not really an issue to use an appropriate daily rate - in practice, you would not get any issue from HMRC if you just consistently used a daily rate from the FT or other credible source.   If you use one source when it suits you and a completely different source for a different transaction when it would give you a worse result to use the first source, that's when you would perhaps start to raise eyebrows at HMRC - but only if the amounts at stake were significant.