Foreign Income 04 - Dividends from foreign companies

Select the check box if you received any dividends from foreign companies. Your dividend voucher will provide the information you need to complete the income details.

Include:

• dividends from foreign companies (use the details on your dividend voucher)
• distributions (use their value at the date of distribution) from overseas sources, such as, company assets released to shareholders
• dividends from overseas unit trusts and other investment funds, including from reporting offshore funds
• excess 'reportable income' from reporting offshore funds - this is income accumulating in offshore funds that you've not yet received. Details of excess reportable income must be provided to participants by the offshore fund

Do not include:

• distributions from the liquidation of a foreign company
• distributions from a foreign company that return your capital interest or are in the form of its own stocks and shares
• stock dividends from foreign companies or bonus shares from a stock dividend issue made by a foreign company. There are specific rules about dividends from offshore funds. If the fund has more than 60% invested in interest bearing assets, any distribution that you receive, or that is reported to you, is treated as interest received. You need to put this under 'Interest and other income from overseas savings'. If you're not sure whether your shares are in an offshore fund, ask your tax adviser

Where you've asked for a cash dividend payable to be used to purchase further shares, most commonly under the terms of a 'dividend reinvestment plan', the cash value of the dividend is taxable and should be included in your tax return as a 'dividend from a foreign company'.

Where a distribution was not made in shares and you've accepted an option from a foreign company to receive cash instead of shares, the cash is taxable. Where you've  exercised an option and you've received a cash distribution instead of shares, the cash is taxable and should be included in your tax return as a 'dividend from a foreign company'

There are specific rules relating to dividends from offshore funds. If the offshore fund from which you've received a payment is substantially invested in interest bearing assets, you're treated as having received interest and not a dividend or other distribution. An offshore fund is an offshore collective investment scheme that may take the form of a non-resident company. Ask your financial advisor or broker if you are not sure whether the shares you hold are in an offshore fund.

Check the Dividend Article of the relevant Double Taxation Agreement as there may be a restriction to the amount of foreign tax credit you can claim.