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HMRC internal manual

International Manual

From
HM Revenue & Customs
Updated
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DT applications and claims : foreign dividends and interest payments

Background

Until 31 March 2001 ICTA88/S118A to S118K required

  • any UK person who was paying foreign dividends or interest on behalf of the overseas issuer of the stock (a paying agent) to deduct tax from those payments
  • a person in the UK who collected foreign dividends or interest on behalf of the beneficial owner (a collecting agent) to deduct tax from those payments.

Subject to certain conditions it was possible for the paying or collecting agent to make these payments without deduction of tax to non-residents.

A non-resident who received payments of foreign dividends (or interest) can make a claim for repayment of any UK income tax deducted on form A1. A banker or other person who was acting as a collecting agent could claim repayment of tax deducted on behalf of the beneficial owner of the security on form C1.

Special rules applied to

  • interest payments from Canada and
  • dividends from Canada, the Netherlands or the United States of America.

In some circumstances you cannot repay the UK income tax deducted and have to pay some or all of it to the taxation authority of the relevant country. There is guidance on this at INTM368300.