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Distributions received by non-UK residents

A distribution from a UK resident company received by a non-UK resident person is treated as having already suffered tax at the dividend ordinary rate. This tax treated as paid is deducted from the total income tax payable in the income tax calculation, but it cannot generate a repayment.¹

It is not necessary to gross up the UK distribution for the UK tax treated as paid. As such, if the UK distribution received is £10,000 then the taxable distribution for the purposes of the UK income tax computation is £10,000.

A distribution falling within these rules is 'non-qualifying income' for the purpose of ITA 2007, s 1025 (meaning of 'modified net income') in the calculation of income tax liability².

For commentary on the UK tax liability of non-resident individuals, see E6.125.

Repayment of earlier distribution of shares or securities

Relief is available where a person receives a distribution