Q&As

Does UK withholding tax apply to the payment of dividends?

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Published by a LexisNexis Tax expert

Published on: 13 February 2017

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As set out in Practice Notes: UK withholding tax on yearly interest and UK withholding tax on royalties, UK tax law generally requires the payer to withhold income tax when making payments of yearly interest and royalties. Except for dividends that are treated as yearly interest, there is no equivalent general rule that requires income tax to be deducted from payments of dividends. In fact, to the extent that interest is recharacterised as a distribution/dividend, the withholding tax obligation should not apply to it (Revenue & Customs Brief 100/09 (archived)). Also, withholding tax only applies on an issue of shares or other securities if the shares

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Jurisdiction(s):

United Kingdom

Key definition:

Withholding tax definition

What does Withholding tax mean?

A tax deducted from foreign investment income. The tax can often be claimed back, either at source or via a reclaim process.

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