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Dividend Taxation

Volume 888: debated on Tuesday 11 March 1975

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asked the Chancellor of the Exchequer how much United Kingdom tax was payable by a resident of the United States of America on an annual income of£1,000 from United Kingdom dividends before 5th April 1973; how much has been payable since that date; what is the reason for the increase; and what action he proposes to take.

pusuant to his reply [Official Report, 10th March 1975], gave the following information:

1974–75£m.1975–76£m.Percentage increase in real terms Per cent.
Revenue Allocation110·227114·2773·67
Capital Allocation*14·20015·1006·34
Total124·427129·3773·98
*The figures include the capital expenditure of the Welsh Health Technical Services Organisation on behalf of Area Health Authorities in Wales.

Before 6th April 1973 a maximum of£150 United Kingdom tax would have been payable on a United Kingdom dividend of£1,000 going to a resident of the United States who fulfilled the relevant conditions of the United States double taxation agreement. Following changes in the United Kingdom system of taxing company profits and dividends he would pay no United Kingdom tax on a dividend paid on or after that date. He would not, however, receive any of the credit which an individual United Kingdom resident shareholder would receive in respect of a dividend. Negotiations to amend the agreement are continuing.