UK Dividend Exemption

With effect from 01 July 2009, the vast majority of dividends received by UK companies from foreign-registered subsidiary companies are exempt from UK corporation tax. The statutory presumption is that dividends received by UK companies are charged to UK corporation tax only if the distribution is not exempt. The scope of the UK tax exemption provisions is wide so that they apply to most dividends received by UK companies.

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The 2009 exemption rules make the UK a prime international holding location, particularly when it is considered that the UK imposes no withholding tax on UK dividends paid to non-UK-resident shareholders e.g. offshore companies. 

Small UK companies (e.g. UK companies employing fewer than 50 persons and with an annual turnover or balance sheet total of less than 50 million Euros) can receive overseas dividends free from UK corporation tax, but only from companies registered or resident in a country with an appropriate double tax treaty with the UK. However, there are no such territorial restrictions on the UK tax exemption for foreign dividends received by medium-sized and large UK companies.

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Jordans Trust Company Limited

First Floor
10 Temple Back

+44 (0117) 918 1407

Hours of Operation:
Mon. to Fri. 9am to 5pm 


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