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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance Basis: Remittance Basis up to 6 April 2008: Employment Income: Foreign dividends - higher rate tax charge

Historically, foreign dividend income remitted to the UK was charged at the basic rate or higher rate of tax dependent on the circumstances of the individual concerned, instead of the usual dividend rates.

However for the tax years 2005-06, 2006-07 and 2007-08, the tax law rewrite project for ITTOIA 2005 unintentionally changed the rate at which foreign dividend income remitted to the UK by a higher-rate paying individual who was taxed on the remittance basis. This meant that in these years foreign dividends were charged at the upper dividend rate of 32.5%, instead of the higher tax rate for those years, which was 40%.

Also refer to RDRM31200 Comparisons with pre-April 2008 regime.