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Exclusion 57 message explained

Article ID: 2967
Last updated: 11 Dec, 2019

You may receive the following error after checking your tax return:

HMRC Exclusion #57: In certain circumstances, where a taxpayer is a non-resident and in receipt of 'other dividend' income of INC5 or Bonus issues of securities and redeemable shares in AOI13 or Partnership dividend income or Trust dividend income, will not receive the 7.5% tax treated as paid to identify maximum tax payable in the non-resident calculation....

There is a workaround to enable you to file the tax return online if the dividend income is in:

HMRC mode > SA100 Core Return > Page 3 > box 5

SimpleStep mode >  Other income > Savings and investments > Shares and unit trusts > Dividend distributions from UK Unit trusts/OEICs.

HMRC has advised that you can transfer the income from:

HMRC mode > SA100 Core Return > Page 3 > box INC5-Other dividends to box INC4-Dividends from UK Companies whilst also adding the details of the amounts to box 19-Any other information on page TR7.

SimpleStep mode > Dividend distributions from UK Unit trusts/OEICs to Dividends and other qualifying distributions from UK companies whilst also adding the details of the amounts to Any other income > Additional information > Click here.

If you have other dividend income elsewhere on return, you will need to file a paper return.

An example of a scenario which will trigger Exclusion 57 is shown below:

Income received (before tax taken off)

Interest from UK banks, building societies and securities etc

   4,000.00

Dividends from UK companies

 30,000.00

Other income

 11,850.00

Total income received

           45,850.00

minus

Personal Allowance

 11,850.00

Total

           11,850.00

Total income on which tax is due

        34,000.00

How I have worked out your Income Tax

Savings interest from banks or building societies, securities etc.

Starting rate

              4,000.00

x 0% =

              -  

Basic rate band at nil rate

                       -  

x 0% =

              -  

Dividends from companies etc.

Basic rate at nil rate

              2,000.00

x 0% =

              -  

Basic rate

            28,000.00

x 7.5% =

     2,100.00

Total income on which tax has been charged

           34,000.00

Income Tax due

 2,100.00

UK resident income tax liability

(A)

     2,100.00

Non-UK resident income tax liability upper limit

(B)

     2,370.00

Lower of (A) or (B)

     2,100.00

The £30,000 of dividend income has been entered into:

HMRC mode > SA100 Core Return > Page 3 >  box 5.

SimpleStep mode > Other income > Savings and investments > Shares and unit trusts > Dividend distributions from UK Unit trusts/OEICs.

and no notional tax @ 7.5% has been deducted. You will see that calculation A results in £2,100 tax being due.

If instead the £30,000 dividend income is entered into:

HMRC mode > SA100 Core Return > Page 3 > box 4.

SimpleStep mode > Other income > Savings and investments > Shares and unit trusts > Dividends and other qualifying distributions from UK companies.

the results are:

Income received (before tax taken off)

Interest from UK banks, building societies and securities etc

4000.00

Dividends from UK companies

30000.00

Other income

11850.00

Total income received

45850.00

minus

Personal Allowance

11850.00

Total

11850.00

Total income on which tax is due

34000.00

How I have worked out your Income Tax

Savings interest from banks or building societies, securities etc.

Starting rate

4000.00

x 0% =

0.00

Basic rate band at nil rate

0.00

x 0% =

0.00

Dividends from companies etc.

Basic rate at nil rate

2000.00

x 0% =

0.00

Basic rate

28000.00

x 7.5% =

2100.00

Total income on which tax has been charged

34000.00

Income Tax charged

2100.00

minus 7.5% tax treated as paid on dividends from UK companies (not repayable)

2250.00

UK resident income tax liability

(A)

0.00

Non-UK resident income tax liability upper limit

(B)

2370.00

Lower of (A) or (B)

0.00

As the notional tax has now calculated correctly, the tax due is reduced to nil and the return can be filed online - remember an explanation should be entered into:

HMRC mode > SA100 Core Return > Page 7 > box 19.

SimpleStep mode > Any other income > Additional information > Click here.

Article ID: 2967
Last updated: 11 Dec, 2019
Revision: 5
Views: 48
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