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Is UK dividend income taxable - non UK resident

Is UK dividend income taxable - UK domicile but living in Angola for last ten years

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My client is of UK domicile and resident in Angola for last 10 years has been receipt of a UK dividends of circa £20K pa. Is there a requirment to file a tax return for each of those years. On the basis that there is could they also make a retrospective election for their UK dividend income to be treated as excluded income.

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By richard thomas
18th Nov 2021 15:54

There is no requirement to file a return unless the client has received a notice to file (s 8 TMA 1970). If they have, note that while they can file returns of total income for all years they can only file a self-assessment with them for years after 2016-17 (s 34A TMA).

Assuming the client has not received such a notice to file, the question is whether they have failed to notify liability for all years up to and including 2020-21, as such a failure can lead to penalties.

Assuming, again, that the UK dividends are their entire UK income then they have been liable throughout to tax at the dividend ordinary rate (DO rate). But s 7(6) TMA absolves a person from notifying liability if all the income from a source is income from which tax is treated as deducted and they are not liable at other than the DO rate. That deemed deduction is given by s 399 ITTOIA 2005, so that in your scenario there is no liability.

I do not follow what you say about “excluded income” or an election.

As to the former, do you have in mind “disregarded income” in s 811 ITA 2007? If so, certainly UK dividends are disregarded income (s 825(2)(a) ITA), but if there is no other income then that status is irrelevant, as liability is limited in any event to the amount of the deemed s 399 tax.

As to the latter, there is no election that I can see relating to “excluded” or “disregarded” income. The limit is applied automatically by HMRC’s tax calculation software.

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Replying to richard thomas:
By [email protected]
18th Nov 2021 16:23


Appreciate your comments.

Many thanks.

Joe Reid

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