The UK currently taxes foreign dividends received by UK companies (with the availability of a tax credit for overseas taxes suffered), but exempts domestic dividend receipts. Draft legislation proposes the introduction of a dividend exemption system which will operate by making all dividend receipts taxable, unless they fall within one of a list of exemptions. The effect will be that both foreign and domestic dividends received by large and medium groups on ordinary shares and most non-ordinary shares will be exempt from UK tax. A targeted anti-avoidance rule will operate to prevent avoidance activity seeking to exploit these dividend exemptions.
Events
Dividend exemption
