Treatment of dividends for non-residents

7.5% tax credit being applied to dividend income for 2017-18

Didn't find your answer?

I have just started doing tax returns for some non-residents.  They have a basic salary from the UK and dividend income from their own limited company.  I was surprised to see that after calculation of the tax, the tax return has added a line stating 'minus 7.5% tax treated as paid on dividends from UK companies (not repayable)'.  This has in effect reveresed the tax charged on the dividends. 

I was not aware of any changes to the way dividends were being taxed for non-doms from 17-18.  Has anybody else come across this? and is it correct?

Replies (6)

Please login or register to join the discussion.

By Tim Vane
13th Nov 2018 15:22

Yes it is correct, and yes you are right that there have not been any changes. Hence the tax credit, which was ever thus. Are you even sure the salary should be taxed if they are non resident?

Thanks (0)
avatar
By Wanderer
13th Nov 2018 15:30

Bet you also overlooked grossing up the dividends by the 7.5%!

Thanks (0)
Replying to Wanderer:
Portia profile image
By Portia Nina Levin
13th Nov 2018 16:46

Come again?

Thanks (0)
Replying to Portia Nina Levin:
avatar
By Wanderer
13th Nov 2018 17:09

Section 399 (5) ITTOI 2005.

Thanks (0)
Replying to Wanderer:
Portia profile image
By Portia Nina Levin
13th Nov 2018 17:25

Are you reading the pre-FA 2016 version or the post-FA 2016 version? It's just that in my post-FA 2016 version there is no subsection 5 in section 399. It jumps from subsection 2 to subsection 6 for some peculiar reason.

Thanks (0)
Replying to Portia Nina Levin:
avatar
By Wanderer
13th Nov 2018 17:32

Pre!
I really must stop reading legislation on gov.uk and go back to the Yellow book!

Thanks (0)