A UK individual has both UK and foreign dividend income, part of which exceeds the basic rate and is taxed at 32.5% in the Revenue's 13/14 tax calculation.
I understand that foreign dividends form the top slice of taxable savings income, meaning that he must have suffered tax on foreign dividends at 32.5%.. Is this right?
In his tax calculation, the Inspector restricts the tax credit to 10% of the gross dividend received, with the comment, "The credit cannot exceed the UK tax charged on the overseas income". Why can't I have a credit for the actual overseas tax suffered , up to the treaty rate of 15% at least? I believe that I can approach the overseas tax authority for tax withheld in excess of the treaty rate.
I would welcome your advice.
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Next please
Yes you can, it's a big hassle and probably not worth bothering with unless the quanta are VERY significant, most fund managers don't bother either if that gives you a clue.
That is correct, assuming that the 15% dividend withholding tax exceeds the UK tax liability then it would be fully creditable. The foreign dividend must somehow be coming into the basic rate band on your tax return if it says the max is 10%.
You can also claim the excess over the 15% withheld and complete forms to obtain this rate upfront depending on the country.
Moneymanager - maybe the funds are not eligible for the treaty rate since most administrators offer a tax reclaim service for qualifying funds?