UK taxation of a foreign dividend: In J Buckingham v HMRC [2023] UKFTT 358 (TC) (4 April 2023) the taxpayer held shares in the Dr Pepper Group which was merged with another company using a Delaware special purpose vehicle. A special dividend was paid to shareholders with accompanying documentation which explained that the dividend was constituted as (broadly) 25% income with the balance being a return of capital. The taxpayer initially treated the whole dividend as a capital gains disposal but after HMRC received information under FATCA it concluded that the income element was taxable as income. After initially using an incorrect procedure HMRC finally raised a discovery assessment bringing the income element into charge. The taxpayer asked for a review and HMRC’s reviewing officer concluded that the entirety of the dividend not just the income amount should be charged to income tax.
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