Foreign dividend tax calculator

Foreign dividends are taxable income for a UK resident, charged at the same rates as dividends from British companies. From the 2026-27 tax year the rates are 10.75% in the basic rate band and 35.75% in the higher rate band. In the additional rate band the rate is 39.35% (Finance Act 2026, section 4). Scottish taxpayers pay these UK rates on dividends too. Any unused Personal Allowance and the £500 dividend allowance are used first (GOV.UK). Tax is worked out on the gross dividend, the amount before the withholding tax taken by the company's own country. Most countries keep part of each payment, so overseas dividends usually arrive as a smaller net dividend. The UK then allows a credit for that foreign tax, up to the rate in the tax treaty with that country. Where UK tax exceeds the credit, the difference is paid through Self Assessment.

Take £1,000 from a US company, paid to someone earning £30,000. The US keeps £150.00, the first £500 falls in the allowance and the rest costs £53.75 in UK tax. The credit cancels that in full, so £850.00 is kept. This case and three others, one from GOV.UK, appear under checked cases, and the methodology explains how they are chosen.

FTCR cuts what the UK charges on a foreign dividend by the tax already taken abroad. This double taxation relief has two limits (Taxation (International and Other Provisions) Act 2010, section 36).

1. The treaty limit. The double taxation agreement (DTA) sets, in its Dividend Article, the most the paying country may keep, such as 15% for the United States. Tax above it is never credited (HMRC, HS263).
2. The UK limit. The credit can bring the UK charge on the dividend down to nil but never below, so anything beyond it becomes unrelieved foreign tax.

Your band decides which limit bites, as one £1,000 US dividend shows:

On £30,000 only £53.75 of UK tax is there to absorb £150.00, so £96.25 is lost. On £60,000 the whole £150.00 is credited and £28.75 remains to pay. Deduction relief, which subtracts foreign tax from the income instead, is not modelled here.

Yes. The allowance and any unused Personal Allowance cover your lowest dividends first, and foreign tax on that slice has no UK tax to offset (HMRC, SA106 notes). This restriction of credit hits small holdings hardest. On a £400 US dividend with no other dividends, the £60.00 kept abroad is simply a cost.

Other dividends change this, because the calculator stacks the foreign one on top of them. After £600 of other dividends, the same payment is taxed at 10.75%, and its £43.00 of UK tax is fully credited. Relief is thus measured against tax at the marginal rate.

Above £100,000 of income, the Personal Allowance shrinks by £1 for every £2, dividends included. On £100,000 of salary, a £2,000 dividend removes £1,000.00 of it and causes £936.25 of UK tax.

US dividend withholding tax is 30% without a treaty claim, and the UK-US tax treaty cuts it to 15% (IRS). A broker applies the lower rate at payment once it holds Form W-8BEN. On that form the investor certifies being the beneficial owner and a UK resident.

Without the form the broker takes the non-treaty rate, £300.00 on £1,000. Only 15% counts for the UK credit, and the other £150.00 needs a US return to recover, so the dividend nets £700.00. Some brokers send a Form 1042-S each year listing the US dividends and the tax taken.

Countries withhold from 12.8% (France) to 35% (Switzerland) of a dividend paid abroad. Their UK treaties bring the tax withheld at source down to 15% or less, at payment or by refund.

• Ireland: 25%, which UK residents avoid with form V2A or recover in full (Revenue, Ireland). With nothing to credit, UK tax of £53.75 is due.
• France: 12.8%, below its 15% treaty rate, so nothing is reclaimable.
• Germany: 26.375% with the solidarity surcharge and no relief at source, so the excess returns only by refund.
• Sweden and Finland: treaty rates of 5% and 0%, so most Swedish and all Finnish tax is reclaimable. A Finnish dividend therefore earns no UK credit.

At the higher rate the country hardly matters. UK tax of £178.75 exceeds what any treaty lets the source keep, so every country ends at £821.25.

Tax above the treaty limit is never credited in the UK. The only route is a claim back from the source country (HS263). The UK also expects reasonable steps to limit foreign tax, such as relief at source.

To reclaim Swiss withholding tax, UK residents use the Swiss Federal Tax Administration's refund form for UK residents, filed online. The deadline is 3 years after the end of the year the dividend fell due. On £2,000 paid to a higher rate taxpayer, £400.00 of the £700.00 comes back, while the UK credits £300.00 and charges £236.25.

Germany allows 4 years, Spain 4 on modelo 210, Denmark 5 and Canada 2 after the year on form NR7-R. Many claims need a UK certificate of residence, and agents' fees can exceed the refund on small holdings.

Dividends in a Stocks and Shares ISA are free of UK tax (GOV.UK). Foreign tax on them therefore has nothing to be credited against. The £1,000 US dividend nets £850.00 in an ISA, its £150.00 of US tax being final. Outside one, the same payment leaves £821.25 at the higher rate.

ISA managers make any treaty claims abroad for the account. Several treaties, the US one among them, exempt UK pension schemes such as a SIPP from dividend tax at source, if the provider claims the exemption.

Ireland-domiciled funds, common on UK platforms, suffer any foreign tax inside the fund before paying out. Interest on cash in an ISA follows its own rules, set out by the savings interest calculator.

Foreign dividends go on the SA106 Foreign pages of a Self Assessment tax return (HMRC, SA106 notes). The table for dividends from foreign companies has columns that follow the steps of the credit.

1. Column A: the country code.
2. Column B: the gross amount in pounds.
3. Column C: the foreign tax, at most what the treaty allows.
4. Column E: a tick to claim FTCR.
5. Column F: the taxable amount.

Each dividend is converted at the exchange rate when the income arose, or at HMRC's yearly average rates. The HS263 helpsheet works out the credit on Working Sheet 1, using the figures on a broker's dividend voucher.

Nothing needs reporting when dividends are your only foreign income and all dividends together stay below the £500 allowance. A credit claim is due within four years after the tax year ends, or by 31 January after the tax year in which the foreign tax is paid, if later.