Authorised Investment Fund
Corporation Tax
Group Module
Investment Trust
Life
Hotline
Pack development
Irish Corporation Tax
Partnership Tax
Partnership Gains
Administrator
Tracker
Hong Kong Profits Tax
VAT
Personal Tax
Corporation Tax Lite
Foreign income dividends |
See Also
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors
It enables the user to calculate the maximum possible Foreign Income Dividends (FIDs) paid in the period which can be matched against distributable foreign profits (DFP).
The FIDs may be matched with foreign profits (net of tax) of the current or previous accounting period, which will depend upon the rates of tax paid in the periods. It may also be matched with later foreign profits. Where a FID has been effectively matched with foreign profits, any surplus ACT in respect of the dividend is used to cover any balance of mainstream corporation tax, or is repaid.
This schedule is developed from the A schedule; alternatively it may be developed from the ACT schedule.
Additional rows can be inserted as required for each source of income.
Some of the data entry cells are described in more detail:
Gross income and reliefs
The user inputs gross income from each foreign source (including DFP of qualifying subsidiaries if applicable), together with any reliefs available against that source.
Foreign tax
The foreign tax (underlying and withholding tax) incurred should also be entered.
The software provides the user with an option to use either the current HMRC practice (default) or an alternative legislative interpretation on the interaction between FID payments and double tax relief (DTR) available on foreign income.
The current HMRC view provides that the maximum amount of DTR is calculated by reference to the UK corporation tax payable on net foreign income and foreign tax attributable to NET foreign income.
The alternative view assumes the calculation of DTR should be based on gross foreign income and not reduced by reliefs, hence increasing the DTR available
Qualifying FID matched under ICTA 1988 246J
The software will automatically compute the source by source DFP available to be matched against FIDs paid. The user then apportions the FIDs against each source's DFP to generate the total amount of ACT to be set off or repaid in the period.
Any unmatched FIDs (those in excess of total DFP) will be carried forward to the following period.
This schedule has no standard sub-schedules.
© 2009 Thomson Reuters.