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Non-resident - Income Disregard

Foreign dividends and US social security pension

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Hello.

I have an elderly client, stuck outside the UK for the whole of 2020/21, so non-resident for the first time. (Naturalised British citizen.)

Total income under £50K which includes state pensions, minimal self employment, and investment income from a UK managed investment portfolio, so UK and foreign divs and interest.

I am using BTC software, and have input all sources of income into the Return, including the usual entries in the foreign income pages; US pension + portfolio interest/divs.

BTC is including foreign divs within disregarded income, (along with UK interest/divs and state pension). The US social security pension is not disregarded (along with self-employment profits and foreign savings interest.)

The list of disregarded income on HS300 references only "UK" divs, and "certain" social security benefits, so I am wondering why BTC has disregarded foreign divs, and whether the US pension should be disregarded.

I have trawled various helpsheets/manuals/articles for further information on this, but found nothing that clarifies/explains the BTC treatment. I don't like relying on the software to this degree, (though it is usually correct!) and need to understand and agree with the outcome it is producing.

Thank you in advance for any assistance.

 

  

 

 

Replies (4)

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By The Dullard
06th Sep 2021 13:13

Why do you think that foreign dividends received by a non-UK resident would even be taxable in the UK in the first place? Likewise the US pension and any other non-UK source income. There's a reason that HS300 has that wording.

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Replying to The Dullard:
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By gouldltd
06th Sep 2021 13:31

I think I see now where I have taken a wrong turn!
Thank you for pointing out the obvious :)

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By David Treitel
06th Sep 2021 14:05

The country of residence has the primary right to charge tax on worldwide income, so hopefully the client is paying tax in that jurisdiction. If not, you may wish to gently nudge the client to pay tax in that location.

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Replying to David Treitel:
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By gouldltd
06th Sep 2021 15:20

Yes, he is.
Thank you for your input.

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