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HMRC internal manual

International Manual

UK residents with foreign income or gains: dividends: Split rate taxes

In addition, some countries tax company profits at a different rate if they are distributed. An additional levy may be charged or part of a higher initial tax refunded. This is known as a split rate tax system.

Dividends paid to the UK on or after 21 March 2000 that have been subject to a split rate of tax are covered by SP3/01. This effectively allocates all the additional tax or reduction to the portion of the profits represented by the dividend, rather than spreading it over the whole profits for the period.

The amount of overseas tax available for credit relief will be calculated by CTIAA Underlying Tax Group, Nottingham. Any case where underlying tax is claimed should be referred to them with the information requested at INTM164440.