Reporting 'foreign' etfs on self assessment

lifemagic · 25 September 2018 at 4:08PM

I have various etfs in 2 accounts, ones on LSE with Halifax and ones on the US markets with IG (uk division) and filled in w8ben with them. The etfs are all vanguard or ishares, except a couple.

I printed the tax certificates and Halifax lists most of the ishares on LSE as Non-UK equity, I'm guessing they are based in Ireland.One of them is listed as 'overseas unit trusts and other investment funds.'

I phoned the tax office and they said to report it as foreign income on the 'foreign supplement'.

So.... I need to check where every single investment I own is domiciled, total it up by country, and list each county code. It's based on domicile of the etf, not it's focu?. So my ishare etf ftse100 dividend is a foreign dividend from Dublin? Is this included in the dividend allowance?

Btw, I'm non resident claiming a personal allowance based on citizenship.

londoninvestor · 25 September 2018 at 6:14PM

lifemagic wrote: »

Btw, I'm non resident claiming a personal allowance based on citizenship.

Was this clear to HMRC when you called them? If you're not tax-resident in the UK, you shouldn't need to pay tax on foreign income - and dividends from foreign-domiciled shares are foreign income.

HMRC page on "Tax on foreign income"

HMRC wrote:

Non-residents only pay tax on their UK income - they don’t pay UK tax on their foreign income.

Supposing you were a UK resident:

Yes, you need to total up the dividends by the country of domicile of the ETF
Your £2k dividend allowance can be used against foreign as well as UK dividends
You can claim Foreign Tax Credit Relief, if the UK has a double taxation treaty with the country of the ETF, to bring your tax down to the higher of UK tax or the foreign country's tax
You need to include the excess reportable income as well as the dividend itself

orcadian · 13 January 2019 at 6:31PM

For a UK investor whose "foreign" ETFs (well known one, begins with i) are all based in Dublin. No foreign tax taken off the dividends.
You add up the dividends and the excess reportable income.
The whole thing totals less than your £2k dividend allowance.
You have no other dividend income.
Any need to report this as foreign income on the 'foreign supplement'?

Or just leave that section blank as your income is less than dividend tax allowance?

londoninvestor · 13 January 2019 at 7:07PM

orcadian wrote: »

For a UK investor whose "foreign" ETFs (well known one, begins with i) are all based in Dublin. No foreign tax taken off the dividends.
You add up the dividends and the excess reportable income.
The whole thing totals less than your £2k dividend allowance.
You have no other dividend income.
Any need to report this as foreign income on the 'foreign supplement'?

Or just leave that section blank as your income is less than dividend tax allowance?

You need to report it, because even a dividend income of less than £2k can affect other parts of your tax (personal allowance withdrawal, child benefit charge etc).

However if the foreign dividends total less than £300, and you're not claiming Foreign Tax Credit Relief for any tax that was taken from them abroad, you can bundle them in with the UK dividends without completing the "foreign" section of the tax return. (link to HMRC instructions)

londoninvestor · 13 January 2019 at 7:09PM

Also, a recent related thread.

Reporting 'foreign' etfs on self assessment

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