Tax relief for foreign dividends

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Tax relief for foreign dividends

Created:: 12 March 2008
Written by:: John McLeod

UK shareholders who own shares in foreign companies are to receive the same initial tax credit on overseas dividends that applies to onshore companies. Basic-rate taxpayers will not have to pay any tax and higher-rate taxpayers will only be subject to an effective tax rate of 25 per cent.

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The change will apply from 6 April, unless you own more than 10 per cent of a foreign company, in which case you must wait another year.

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