US share dividend tax - self assessment

planforfuture

Please help ...

My combined US and non-ISA shares dividends payout will exceed the £1000 allowance for FY2023-24.

For the US shares, 15% withholding tax have already been deducted at source as per the W8-BEN arrangement. When filling the UK self assessment tax form for 2023-24 under the foreign income section, 

1) Do I need to enter the gross or after the 15% deducted dividend amount?

2) Will I receive tax credit for the 15% withholding tax I already paid to the US government?

eskbanker

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1148103/sa106_2023_notes.pdf explains what needs to be entered, and how to claim the FTCR.

However, note that it's only necessary to complete the foreign income page itself if the dividends exceeded £2K:

Use the ‘Foreign’ pages if you received: 

• interest (over £2,000) and income from overseas savings 

• dividends (over £2,000) from foreign companies – if your only foreign income was untaxed foreign interest up to £2,000 and or foreign dividends up to £2,000, you can put these amounts in box 3 and box 5 on page TR 3 of your tax return instead of completing the ‘Foreign page’ (subject to the guidance on pages TRG 5 and 6)

[...]

planforfuture

Thanks for the prompt reply. I estimate there will be £2.3k dividend in total I will receive so take into account of the £1k allowance), i need to declare £1.3k to be dividend taxed. A large part of the £1.3k are from US shares and the rest are from UK investment trusts.

Dazed_and_C0nfused

planforfuture said:

Thanks for the prompt reply. I estimate there will be £2.3k dividend in total I will receive so take into account of the £1k allowance), i need to declare £1.3k to be dividend taxed. A large part of the £1.3k are from US shares and the rest are from UK investment trusts.

There is no "allowance" for dividends.

The whole £2.3k needs to be declared and unless you have any unused Personal Allowance it will all be taxed.  And will also form part of your adjusted net income.

The first £1,000 will be taxed at 0%.

planforfuture

Thanks for the prompt.  In order to minimise the taxable income. I will take a UFPLS one off lumpsum from my SIPP this FY. Am I right that taking £14460 (I.e 16760 - 2300 is the most efficient tax free UFPLS  amount to take out providing I do not have any other incom.