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Foreign dividend income is being grossed up on the tax computation

Article ID
ias-7927
Article Name
Foreign dividend income is being grossed up on the tax computation
Created Date
9th June 2009
Product
IRIS Personal Tax
Problem
The foreign dividend income is being grossed up on the tax computation and for some clients it is also allowing a 10% non-repayable tax credit.
Resolution
This has occurred due to changes in the way that foreign dividend income is treated for the 2009 tax year onwards. More information on these changes can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323640/hs263.pdf https://www.opsi.gov.uk/acts/acts2008/ukpga_20080009_en_31 Users are required to enter the amount received including any foreign tax deducted. This amount will then be grossed up at a rate of 100/90 and shown within the income section of the tax computation. The 10% tax credit will be allocated within the other relief section of the computation. Note that this tax credit amount can be claimed in addition to any foreign tax credit relief that the client may be entitled to. If the client is not entitled to UK tax credits this amount can be removed from the computation as follows: 1. Log onto IRIS Personal Tax and select the client 2. Click Foreign, select Dividends and Interest 3. Double click on the source record located in the top half of the screen to the right 4. Enable the Does not qualify for UK tax credits then click OK The above process will also prevent the dividend amount from being grossed up on the clients tax computation.

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