Dividends paid in cash or as stock by any company becomes chargeable to tax depending on individual’s residency and domicile status. This document provides details on: dividend nil rate band; dividend tax rates; UK dividends received by residents and non-residents; Overseas dividends taxed on arising and remittance basis; Interaction with temporary non-residence rules; reporting requirements.

Points discussed within this guidance note:

> Introduction to taxation of dividends

The dividend tax regime fundamentally changed from 6 April 2016. The taxation of dividends for UK residents now includes a dividend nil rate band per tax year. UK tax on foreign dividends is calculated using a different scheme.

> When is a dividend taxable?

This note sets out how to calculate the tax treatment of dividends. Whether a dividend is taxable in the UK depends on the circumstances of the individual and whether the dividend is paid by a UK resident company or an overseas resident company.

> UK dividends and overseas dividends taxable on the arising basis

>> Dividend income paid on or after 6 April 2016

>> Dividend income paid before 6 April 2016

> UK dividends received by non-residents

> Interaction with temporary non-residence rules

>> Meaning of key terms

>> Reporting

> Overseas dividends taxed on the remittance basis


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