Foreign dividends tax credit extension
The measure
Finance Act 2008 introduced a 10% tax credit for individuals receiving foreign dividends, provided that their shareholding is less than 10% and the company is not an offshore fund. Following Budget day announcements this is to be extended to individual shareholders with a 10% or greater shareholding in a foreign company. This is subject to the introduction of anti-avoidance provisions, and will normally be available if the distributing company is resident in a territory with which the UK has a double taxation agreement with a non-discrimination article.
Who will be affected?
Individual shareholders with a 10% or greater shareholding in a foreign company which is located in a qualifying territory.
When?
The extended measure will apply from 22 April 2009.
The extension of the ability to claim the tax credit is to be welcomed and reflects the fact that entrepreneurs living in the UK can have a global aspect in their activities.
