Tax treatment of UK Dividends

B

bowringi

Guest
Could anyone clarify for me the treatment of UK Dividends - I know they are a special case. For other foreign dividends (in double taxation jurisdicions) I put the Gross Dividend as income, and offset the total of foreign and Irish withholding taxes against my total tax.

The UK Dividends are paid net of a 10% Tax credit. Do I declare the Gross Dividend as income, and offset the Tax Credit against tax, or do I declare the Net Dividend, and make no offset against tax (less favourable).

Thanks.
 
I think that you do it the first way - declare the gross dividend and then deduct the UK witholding tax from your Irish liability. The [broken link removed] certainly suggests that that's the case.
 
Thanks. That would be my initial thought, but interestingly Form 12 (or Form 11) specifically asks for "Net Dividends Received"
 
Sorry - you're right. Perhaps you enter the net dividend and somewhere else mention the witholding tax for which you are claiming a credit? Your liability is then the difference between the witholding tax and Irish income tax on the dividend income (20% or 42% depending on your gross income, including dividend income).
 
Since 1999 there is no entitlement to a tax credit on UK dividends and an Irish resident is taxable on the net amount received.
 
Thanks for that clarification Capall and apologies for any confusion caused. Seems odd that the Ireland-UK double taxation agreement doesn't cover this though. Is there a particular reason that such credits were ceased?
 
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