Foreign Dividend Tax Calculator UK 2026/27
UK residents pay UK dividend tax on foreign dividends1 at exactly the same rates as UK ones. The wrinkle is withholding tax — the overseas country often takes a slice at source. You can usually offset that against your UK bill, but not always in full. Here's how the two interact, with worked examples and how to declare it all3.
- Foreign dividends are taxed at the UK rates2 — 10.75% / 35.75% / 39.35% — and share the one £500 allowance with your UK dividends.
- Overseas withholding tax (commonly 15% on US shares under treaty) can be offset against your UK liability1.
- The foreign tax credit is capped at the UK tax due — excess withholding isn't refunded.
- Foreign dividends go on the SA106 foreign pages3, not the UK dividends section.
- A W-8BEN form with your broker cuts US withholding from 30% to 15%; it still applies inside an ISA, where it can't be reclaimed.
UK tax on foreign dividends, same rates as domestic
UK residents pay UK dividend tax on foreign dividends at the same rates as on UK company dividends. It doesn't matter whether you hold the shares directly, through a platform, or via a fund.
The 2026/27 rates are 10.75% basic, 35.75% higher and 39.35% additional. The £500 dividend allowance covers all your dividends — UK and foreign combined. HMRC does not distinguish between the two when applying rates.
Common withholding tax rates for UK investors
| Country | Withholding rate (treaty) | Without treaty |
|---|---|---|
| USA | 15% | 30% |
| Germany | 15% | 25% |
| France | 12.8% | 30% |
| Ireland | 0% | 25% |
| Netherlands | 15% | 15% |
Rates shown are treaty rates applicable to most individual UK investors. Actual rates depend on treaty provisions and broker documentation. File a W-8BEN form with your broker for US withholding reduction.
Worked example: US dividend with withholding tax
A UK basic-rate taxpayer gets a US dividend with a gross amount of £1,000. The broker withholds 15% = £150 and pays £850 net. Assume total dividends for the year exceed £500.
- UK dividend tax at basic rate (10.75%) on £1,000 gross = £107.50.
- Foreign tax credit for withholding: £150, but capped at UK tax due of £107.50.
- Additional UK dividend tax owed: £0 (withholding exceeds UK liability).
- Excess withholding (£150 − £107.50 = £42.50): cannot be reclaimed.
For a higher-rate taxpayer on the same £1,000 US dividend, the UK rate is high enough that there's still tax to pay after the credit:
| Gross US dividend | £1,000 |
| US withholding tax at 15% (treaty rate) | £150 |
| UK dividend tax at 35.75% | £357.50 |
| Less foreign tax credit (capped at UK tax due) | £150.00 |
| Additional UK tax owed | £207.50 |
A basic-rate taxpayer on the same £1,000 owes £107.50 of UK tax (10.75%), which is less than the £150 already withheld — so no further UK tax is due, but the £42.50 of excess withholding can't be reclaimed.
How to declare on Self Assessment
Foreign dividends go on the SA106 Foreign income supplementary pages — not the UK dividends section. Enter the gross dividend before any withholding, the withholding tax deducted, and claim the foreign tax credit. Convert to sterling at the exchange rate on the date of receipt.
Your broker or platform should provide an annual tax certificate listing dividends by country with withholding amounts. Use that. The deadline for 2026/27 income is 31 January 2028.
Foreign dividends inside an ISA
UK dividend tax doesn't apply to dividends inside a Stocks and Shares ISA, regardless of whether the holding is UK or foreign. But the foreign country's withholding tax still applies at source — even inside an ISA. US holdings in ISAs typically suffer 15% US withholding (after submitting a W-8BEN form) with no way to reclaim it, because there's no UK tax liability to offset against. That makes US dividend stocks marginally less efficient inside an ISA than UK dividend stocks.