Foreign Dividend Tax Calculator 2026/27
Work out the UK tax on dividends from overseas shares, the foreign tax credit you can claim, and what you actually keep after withholding tax. Built for UK residents holding foreign shares outside an ISA or pension.
UK residents pay UK dividend tax on foreign dividends at the 2026/27 rates of 10.75%, 35.75% or 39.35% above the £500 allowance, on the gross amount before withholding. Tax already withheld abroad is credited, up to the treaty rate (15% for US shares) and up to the UK tax on that dividend. Example: a higher-rate taxpayer with £2,000 of US dividends has £300 withheld and pays £236.25 more in the UK.
How Foreign Tax Credit Relief works
You declare the gross foreign dividend, before any tax was taken off, and work out UK dividend tax on it in the normal way: it sits on top of your other income, so your salary or pension decides whether it meets the 10.75%, 35.75% or 39.35% rate. You then deduct the foreign tax as a credit. The credit can never be more than the UK tax on that dividend, and it is limited to the rate in the tax treaty between the UK and that country. Anything withheld above the treaty rate has to be reclaimed from the foreign tax authority, not from HMRC.
Worked examples: £2,000 of US dividends
| Salary | US tax withheld | UK tax on the dividends | Credit | Extra UK tax | You keep |
|---|---|---|---|---|---|
| £40,000 | £300.00 | £161.25 | £161.25 | £0.00 | £1,700.00 |
| £60,000 | £300.00 | £536.25 | £300.00 | £236.25 | £1,463.75 |
| £150,000 | £300.00 | £590.25 | £300.00 | £290.25 | £1,409.75 |
2026/27, no other dividends, 15% US withholding after a W-8BEN. The first £500 of dividends is covered by the dividend allowance (0%), so UK tax is on £1,500. At £40,000 the basic-rate UK tax (£161.25) is less than the US tax, so £138.75 of the US tax goes unused.
How to claim it
Foreign dividends go on the Foreign pages (SA106) of your Self Assessment return, not in the UK dividends box. Enter the gross amount converted to pounds (at the rate on the day you received it, or HMRC's published average rates), the foreign tax deducted and your Foreign Tax Credit Relief claim. Your platform's annual tax certificate usually lists dividends and withholding by country. For 2026/27 the return and any tax due are due by 31 January 2028. If your total dividends are over £10,000, or you already file a return, you must report them through Self Assessment.
Frequently asked questions
- Do I pay UK tax on US dividends?
Yes, if you are UK resident and the shares are outside an ISA or pension. The gross US dividend is taxed at the UK dividend rates for 2026/27 (10.75%, 35.75% or 39.35% above the £500 allowance), and the 15% US withholding tax is credited against that UK tax. A basic-rate taxpayer usually has nothing more to pay; a higher-rate taxpayer pays the difference between 35.75% and 15%.
- How much foreign tax can I offset against UK tax?
The credit is the lower of the foreign tax you paid, capped at the rate in the UK's tax treaty with that country, and the UK tax on that dividend. Tax withheld above the treaty rate is not credited in the UK and has to be reclaimed from the foreign tax authority, and any credit above your UK tax on the dividend is lost.
- Where do foreign dividends go on my tax return?
On the Foreign pages (SA106) of your Self Assessment return, not in the UK dividends box. Enter the gross dividend in pounds, the foreign tax taken off and whether you are claiming Foreign Tax Credit Relief. The 2026/27 return is due by 31 January 2028.
- Can I reclaim US withholding tax on shares in my ISA?
No. There is no UK tax on ISA dividends, so there is nothing to set the 15% US withholding against, and it cannot be reclaimed from HMRC. Filing a W-8BEN through your platform keeps the rate at 15% rather than 30%.
Related guides & calculators
- Foreign dividend tax UK: withholding and double taxation
- Foreign dividend tax guide
- Investment dividend tax calculator
- Are ISA dividends taxed?
- Dividends and Self Assessment
Sources: GOV.UK: Tax on foreign income, if you're taxed twice · GOV.UK: Tax on dividends. Results are estimates, not tax advice.