UK income tax on UK dividends for non-resident

[myprivate]

I'm British but officially non-resident there having lived in Thailand for many years (I definitely meet the UK non-res criteria).

So do I have to pay UK income tax on the dividends from UK listed shares? My broker account is in the UK if that makes any difference.

Edited January 21, 2016 by myprivate

[wordchild]

The short answer is (as a non resident) you don't have to pay UK income tax on dividends from UK listed shares.

Edited January 21, 2016 by wordchild

[IanLongbon]

The basic principle is that you have to pay UK tax on all income arising from the UK. Your tax residence status gives you the option to receive certain income gross, that is with no basic rate of tax deducted at source, but you must still account to the UK HMRC for your UK sourced income unless your total UK based income is less than the UK Personal Allowance. But, be aware, the U.K. Personal allowance may well be reduced to zero in future years.

[GordonP]

I have a recollection that the exemption for non residents was cancelled in the days that George Brown was chancellor at the same time he revoked some advantages that pension funds had.

[crazykopite]

The basic principle is that you have to pay UK tax on all income arising from the UK. Your tax residence status gives you the option to receive certain income gross, that is with no basic rate of tax deducted at source, but you must still account to the UK HMRC for your UK sourced income unless your total UK based income is less than the UK Personal Allowance. But, be aware, the U.K. Personal allowance may well be reduced to zero in future years.

I read reports last year that there was a discussion to stop the personal allowance for expats , I hope that this never happens as all my income is from the UK and reducing it to zero would be hard to swallow to the fact I would have to consider returning back to the UK what a terrible thought !!!!!!

[alanrchase]

Two years ago 10% tax was deducted at source from my dividends. Believe the rules changed recently and there is no longer tax deducted at source, I no longer get it taken off. My broker however is offshore.

[maingmoom]

The basic principle is that you have to pay UK tax on all income arising from the UK. Your tax residence status gives you the option to receive certain income gross, that is with no basic rate of tax deducted at source, but you must still account to the UK HMRC for your UK sourced income unless your total UK based income is less than the UK Personal Allowance. But, be aware, the U.K. Personal allowance may well be reduced to zero in future years.

I read reports last year that there was a discussion to stop the personal allowance for expats , I hope that this never happens as all my income is from the UK and reducing it to zero would be hard to swallow to the fact I would have to consider returning back to the UK what a terrible thought !!!!!!

I think that it is absolutely disgusting how the British government are treating ex pats. No inflation payments on our pensions. Last year they abolished the capital gains tax exemption for ex pats. Now they will probably abolish the personal tax allowance in the near future. There is the big question do we get free medical care when visiting England. You defiantly have to pay tax on any income over your personal allowance. None of this matters that you may like myself, worked all your life paying full contributions, and never having a day on the doll or claiming any sick benefits.

[sometimewoodworker]

There is the big question do we get free medical care when visiting England. You defiantly have to pay tax on any income over your personal allowance. None of this matters that you may like myself, worked all your life paying full contributions, and never having a day on the doll or claiming any sick benefits.

Actually it's not a big question.

No free medical care for visitors to England. Apart from emergency treatment.

Not all hospitals check throughly so you may slip by.

However if you are qualified for the NHS and you intend to live in England treatment is free from day 1.

[steve73]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

[Globalist]

I believe the relevant term for taxation purposes is "domecile" rather than "residence".

Each country has its own rules to governing domecile.

The US' rule is easy; every US citizen is considered domeciled in the US no matter where they live or for how long.

European countries' rules are typically different, and the UK's rules are likely rather complicated as that's how they like to do things.

So I think it's a matter of decoding those rules, potentially with the assistance of a UK tax lawyer.

[Baerboxer]

I believe the relevant term for taxation purposes is "domecile" rather than "residence".

Each country has its own rules to governing domecile.

The US' rule is easy; every US citizen is considered domeciled in the US no matter where they live or for how long.

European countries' rules are typically different, and the UK's rules are likely rather complicated as that's how they like to do things.

So I think it's a matter of decoding those rules, potentially with the assistance of a UK tax lawyer.

An American thinking UK tax rules are complicated - how quaint.

The PA for UK expat tax payers was not abolished, although came close to being. You should still complete a UK tax return if you have any income that arises from the UK. If your bank or dividend payers deduct withholding tax you show that on the form too. If you are under the PA threshold, and have paid withholding tax then it will be funded. If you are over the threshold then you will owe tax.

Where expats lost out was the change to tax exemption on the sale of the main UK property. UK residents can sell free of capital gains tax. Expats can no longer do this. But the CG will be based on any increase in the house value from its 2015 valuation, not price purchases. No doubt there will be some interesting valuation arguments in the future for some of us.

[Pdavies99]

The basic principle is that you have to pay UK tax on all income arising from the UK. Your tax residence status gives you the option to receive certain income gross, that is with no basic rate of tax deducted at source, but you must still account to the UK HMRC for your UK sourced income unless your total UK based income is less than the UK Personal Allowance. But, be aware, the U.K. Personal allowance may well be reduced to zero in future years.

You say you are non resident having lived here some years, but have you informed the UK Inland Revenue and have they given you non resident status, its not automatic you know...have you kept up your tax returns? You still have to effect them UNTIL told by I R that they are happy with your status etc, you see its up to you to communicate with them!

Also they will require to see any income earnt world wide be it from working or investment income ..dividends etc, before any decision. But all income derived within the UK is generally liable to tax less personal allowances.

[denby45]

I am 58 years old and pretty much retired. I am thinking of going back to the UK and declaring residence again sometime before my 65th. birthday. For obvious reasons nods as good as a wink they say. Although my real intention is to live in Thailand most of the year. I do know about the 183 day rule but do they really enforce that. I would suppose they are more interested about people who are not out of the country long enough and therefore cannot claim the tax relief which comes with being Non Resident.

Also what sort of reporting do you have to do before pension age if you are living in the UK. Is it mandatory e.g. that you sign on the dole etc.

Den

Edited January 22, 2016 by denby45

[louse1953]

I am 58 years old and pretty much retired. I am thinking of going back to the UK and declaring residence again sometime before my 65th. birthday. For obvious reasons nods as good as a wink they say. Although my real intention is to live in Thailand most of the year. I do know about the 183 day rule but do they really enforce that. I would suppose they are more interested about people who are not out of the country long enough and therefore cannot claim the tax relief which comes with being Non Resident.

Also what sort of reporting do you have to do before pension age if you are living in the UK. Is it mandatory e.g. that you sign on the dole etc.

Den

A mate of mine did it all online from Thailand.

[Jip99]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

Incorrect.

For Non Residents there is no further liability to basic rate tax on dividends.

If the dividends take you into a higher tax bracket then tax is due accordingly.

[wordchild]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

There has been a change to the way dividends are taxed for residents (ie the introduction of a new tax on dividend income above a certain level) but there has been no change to the taxation of dividends for non residents.

Although dividends may be UK sourced income they (along with interest on bank deposits) enjoy exemption from additional UK income tax for non residents (ie beyond that which is deducted/deemed to be deducted at source). The personal allowance is a bit of a red herring here. If your income from dividends is above the personal allowance (and there would be some benefit) then you have the option to forego your personal allowance and make use of an exemption that allows you to class your dividends as "disregarded income" for the purpose of UK tax. ie they do not form part of any UK tax liability so no tax to pay no matter how large the dividend income.

As others have noted, as a non resident, you may need to declare this disregarded income (though HMRC may waive this requirement after a period if you have no other UK sourced income).

this explains it http://www.hmrc.gov.uk/manuals/saimmanual/saim1170.htm

Edited January 22, 2016 by wordchild

[partington]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

Incorrect.

For Non Residents there is no further liability to basic rate tax on dividends.

If the dividends take you into a higher tax bracket then tax is due accordingly.

This, and I'm afraid most of the above posts are not completely accurate.

I'm not clear what happens after April 6th this year, when the way dividends are taxed will undergo a complete change, but I do know and understand the system that has applied for the last 10 years and is still in effect for this tax year.

Firstly non-residents for tax purposes (nothing to do with "domicile", just not being in the UK for a complete tax year) were not subject to ANY dividend tax. In the UK dividends are subject to a notional 10% tax, which can be used as a credit to offset a tax bill by UK residents, but not by non-residents. In effect this notional tax had no relevance to non-residents because quoted dividend payments are made including this notional tax, so you got exactly what the published dividend stated.

For non-residents dividends WERE what's called "disregarded income", that is, they were not subject to any tax other than that taken at source, if any. This was the case only if you did not claim a personal allowance.

For argument's sake let's call the personal allowance £10,000: a non-resident earning (as their only UK income for simplicity) £10,000 in dividend payments in the UK would claim their £10,000 personal allowance and not have to pay any tax. A non-resident earning £10,001 to any amount in UK dividends would not claim a personal allowance and pay no tax.

However this tax year the tax system on dividends has completely changed. The notional 10% tax at source has been abolished. Now UK residents are allowed to earn £5000 in dividends tax-free, and tax payable on earnings above this limit depend on what tax band you are currently in. Those paying basic rate income tax pay 7.5% on dividend income above £5000, those paying higher rate income tax pay 32.5% on dividend income above £5000, and those in the additional rate income tax bracket pay 38.1% on dividends above £5000.

It has not been made clear what the position of non-residents is in this new system. The simplest assumption is that, as a non-tax payer , i.e. you don't even come into the basic rate bracket, you would not be liable for any tax at all on dividends, which seems like a big advantage. But I don't know for sure because I can't find clear guidelines on any HMRC site so far...

Hopefully someone KNOWLEDGEABLE will post the answer.

EDIT to correct typo and non-resident definition for disregarded income purposes. Also just noticed my example doesn't make sense. It's only if your below £10,000 income was partially dividends and partially other income, for example rent, that you would need to claim a personal allowance. Otherwise all dividend income is just untaxed...

Edited January 22, 2016 by partington

[wordchild]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

Incorrect.

For Non Residents there is no further liability to basic rate tax on dividends.

If the dividends take you into a higher tax bracket then tax is due accordingly.

This, and I'm afraid most of the above posts are not completely inaccurate.

I'm not clear what happens after April 6th this year, when the way dividends are taxed will undergo a complete change, but I do know and understand the system that has applied for the last 10 years and is still in effect for this tax year.

Firstly non-residents for tax purposes (nothing to do with "domicile", just being in the UK for fewer than 183 days in the UK for a complete tax year) were not subject to ANY dividend tax. In the UK dividends are subject to a notional 10% tax, which can be used as a credit to offset a tax bill by UK residents, but not by non-residents. In effect this notional tax had no relevance to non-residents because quoted dividend payments are made including this notional tax, so you got exactly what the published dividend stated.

For non-residents dividends WERE what's called "disregarded income", that is, they were not subject to any tax other than that taken of at source. This was the case only if you did not claim a personal allowance.

For argument's sake let's call the personal allowance £10,000: a non-resident earning (as their only UK income for simplicity) £10,000 in dividend payments in the UK would claim their £10,000 personal allowance and not have to pay any tax. A non-resident earning £10,001 to any amount in UK dividends would not claim a personal allowance and pay no tax.

However this tax year the tax system on dividends has completely changed. The notional 10% tax at source has been abolished. Now UK residents are allowed to earn £5000 in dividends tax-free, and tax payable on earnings above this limit depend on what tax band you are currently in. Those paying basic rate income tax pay 7.5% on dividend income above £5000, those paying higher rate income tax pay 32.5% on dividend income above £5000, and those in the additional rate income tax bracket pay 38.1% on dividends above £5000.

It has not been made clear what the position of non-residents is in this new system. The simplest assumption is that, as a non-tax payer , i.e. you don't even come into the basic rate bracket, you would not be liable for any tax at all on dividends, which seems like a big advantage. But I don't know for sure because I can't find clear guidelines on any HMRC site so far...

Hopefully someone KNOWLEDGEABLE will post the answer.

The draft legislation for the 2016 Finance Bill (recently published) has made this more clear; unless there is further change before it becomes law (unlikely) , then the exemption for non residents will still apply in future years So again, for a non resident, the tax liability on UK sourced dividends is limited to that which is deemed to have already been deducted at source. The change in the taxation for residents has not affected this exemption , they have just introduced some changes to the wording.

here is the link to the draft legislation https://www.gov.uk/government/collections/finance-bill-2016

Edited January 22, 2016 by wordchild

[partington]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

Incorrect.

For Non Residents there is no further liability to basic rate tax on dividends.

If the dividends take you into a higher tax bracket then tax is due accordingly.

This, and I'm afraid most of the above posts are not completely inaccurate.

I'm not clear what happens after April 6th this year, when the way dividends are taxed will undergo a complete change, but I do know and understand the system that has applied for the last 10 years and is still in effect for this tax year.

Firstly non-residents for tax purposes (nothing to do with "domicile", just being in the UK for fewer than 183 days in the UK for a complete tax year) were not subject to ANY dividend tax. In the UK dividends are subject to a notional 10% tax, which can be used as a credit to offset a tax bill by UK residents, but not by non-residents. In effect this notional tax had no relevance to non-residents because quoted dividend payments are made including this notional tax, so you got exactly what the published dividend stated.

For non-residents dividends WERE what's called "disregarded income", that is, they were not subject to any tax other than that taken of at source. This was the case only if you did not claim a personal allowance.

For argument's sake let's call the personal allowance £10,000: a non-resident earning (as their only UK income for simplicity) £10,000 in dividend payments in the UK would claim their £10,000 personal allowance and not have to pay any tax. A non-resident earning £10,001 to any amount in UK dividends would not claim a personal allowance and pay no tax.

However this tax year the tax system on dividends has completely changed. The notional 10% tax at source has been abolished. Now UK residents are allowed to earn £5000 in dividends tax-free, and tax payable on earnings above this limit depend on what tax band you are currently in. Those paying basic rate income tax pay 7.5% on dividend income above £5000, those paying higher rate income tax pay 32.5% on dividend income above £5000, and those in the additional rate income tax bracket pay 38.1% on dividends above £5000.

It has not been made clear what the position of non-residents is in this new system. The simplest assumption is that, as a non-tax payer , i.e. you don't even come into the basic rate bracket, you would not be liable for any tax at all on dividends, which seems like a big advantage. But I don't know for sure because I can't find clear guidelines on any HMRC site so far...

Hopefully someone KNOWLEDGEABLE will post the answer.

The draft legislation for the 2016 Finance Bill (recently published) has made this more clear; unless there is further change before it becomes law (unlikely) , then the exemption for non residents will still apply in future years So again, for a non resident, the tax liability on UK sourced dividends is limited to that which is deemed to have already been deducted at source. The change in the taxation for residents has not affected this exemption , they have just introduced some changes to the wording.

Thanks for posting this, you don't have a link by any chance?

[Krataiboy]

I believe the relevant term for taxation purposes is "domecile" rather than "residence".

Each country has its own rules to governing domecile.

The US' rule is easy; every US citizen is considered domeciled in the US no matter where they live or for how long.

European countries' rules are typically different, and the UK's rules are likely rather complicated as that's how they like to do things.

So I think it's a matter of decoding those rules, potentially with the assistance of a UK tax lawyer.

The UK government uses "domicile" to catch you in the tax net and residence to deny you any benefits (NHS treatment, pension uplifts, etc) - no matter how much you have paid in tax or National Insurance contributions..

If they add insult to injury by robbing us of our 10,600 quid tax allowance, I'll bung my family on to the first available boat to Blighty and claim refugee status!

Edited January 22, 2016 by Krataiboy

[wordchild]

Link added to above post

[wordchild]

Effectively, as it stands, from the start of the new financial year, UK non residents, who receive UK dividends, will be deemed to have already paid tax "at the ordinary dividend rate" on that income; this replaces the old wording which referred to the tax that had already been deducted at source.

Edited January 22, 2016 by wordchild

[myprivate]

Effectively, from the start of the new financial year, non UK residents, who receive UK dividends, will be deemed to have already paid tax "at the ordinary dividend rate" on that income; this replaces the old wording which referred to the tax that had already been deducted at source.

Some great replies. Any idea what the "ordinary dividend tax rate" will be in the new financial year?

[wordchild]

sorry, having checked it again the wording in the draft is "dividend ordinary rate" not "ordinary dividend rate"

[sometimewoodworker]

The basic principle is that you have to pay UK tax on all income arising from the UK. Your tax residence status gives you the option to receive certain income gross, that is with no basic rate of tax deducted at source, but you must still account to the UK HMRC for your UK sourced income unless your total UK based income is less than the UK Personal Allowance. But, be aware, the U.K. Personal allowance may well be reduced to zero in future years.

You say you are non resident having lived here some years, but have you informed the UK Inland Revenue and have they given you non resident status, its not automatic you know...have you kept up your tax returns? You still have to effect them UNTIL told by I R that they are happy with your status etc, you see its up to you to communicate with them!

Also they will require to see any income earnt world wide be it from working or investment income ..dividends etc, before any decision. But all income derived within the UK is generally liable to tax less personal allowances.

Having completed a UK tax return for the last 25 years of being outside the UK I can assure you that I have never had to declare any form of income earned out side the UK as all my non UK income has come from non UK companies or sources.

Also FWIW there is no UK IR it is HMRC

[Maestro]

I see no mention of a double taxation agreement in this topic.

A web search gives conflicting results:

1. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/412193/uk-thailand-dtc180281.pdf
   
   UK/THAILAND DOUBLE TAXATION CONVENTION
   SIGNED 18 FEBRUARY 1981
   Entered into force 20 November 1981
   
2. http://www.thailawforum.com/database1/Thailand-US.html
   
   CONVENTION BETWEEN THE GOVERNMENT OF THE KINGDOM OF THAILAND AND
   THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN
   AND NORTHERN IRELAND
   FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION
   OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
   Given on 14th February B.E. 2540 (1997)

Would a double taxation convention, if one were currently in force, have any effect on the taxation of income from dividends? I believe that the general idea of a double taxation agreement is that tax on any type of income should be payable only in one of the two countries, or that tax paid by a UK national non-resident in the UK to the UK tax authority is applicable against tax assessed in Thailand for that income.

[wordchild]

Effectively, from the start of the new financial year, non UK residents, who receive UK dividends, will be deemed to have already paid tax "at the ordinary dividend rate" on that income; this replaces the old wording which referred to the tax that had already been deducted at source.

Some great replies. Any idea what the "ordinary dividend tax rate" will be in the new financial year?

The rates for the new dividend tax (for UK tax residents) have been published there is a starting rate of 7.5% for dividend income above 5000 (after adjusting for the personal allowance) and it rises from there. As things stand, the "dividend ordinary rate" is 10% which equates to the (soon to be abolished) tax credit. I am not sure what the rate will be for the new tax year and I cant find a reference to it, maybe someone else can.

For an expat, the whole thing is really purely notional anyway as there is no suggestion (at this stage) that there is any move to get rid of the disregarded income concession; in fact the way the legislation is drafted the govt seems to have gone to lengths (stretching logic in some respects) to ensure that this is retained; eg we are going to abolish the concept of a tax credit but we are going to retain the (originally linked) concept of a "dividend ordinary rate". This seems to (me anyway) be just so the legislation can be framed in such a way as to suggest that a non resident, who receives a UK sourced dividend has already borne some taxation.

This is not the UK being kind to non residents, its just that trying to tax UK dividends received by non residents (companies as well as individuals) would open up a whole new can of worms; eg the cost of equity for UK plc in general. There is also the legal practicalities of how it could be done; eg unless the UK is going to move to an American style citizenship obligation to pay tax wherever you reside, it could only really be done through a withholding tax on dividends. It could be argued that, with these changes, the govt has moved someway in this direction and left the door open for this in the future but they don't seem to be ready to go quite that far yet. However if the UK gets a Corbyn led Labour govt I would have thought it would be pretty much a certainty that they would move down this path. In fact, Corbyns economic guru (Richard Murphy) has spoken often ,in the past, about the merits of the UK introducing a withholding tax of some sort.

Edited January 23, 2016 by wordchild

[Chongalulu]

Divi's are taxable if above PA, however, any capital gains are not liable to tax in UK.

Incorrect.

For Non Residents there is no further liability to basic rate tax on dividends.

If the dividends take you into a higher tax bracket then tax is due accordingly.

This, and I'm afraid most of the above posts are not completely accurate.

I'm not clear what happens after April 6th this year, when the way dividends are taxed will undergo a complete change, but I do know and understand the system that has applied for the last 10 years and is still in effect for this tax year.

Firstly non-residents for tax purposes (nothing to do with "domicile", just not being in the UK for a complete tax year) were not subject to ANY dividend tax. In the UK dividends are subject to a notional 10% tax, which can be used as a credit to offset a tax bill by UK residents, but not by non-residents. In effect this notional tax had no relevance to non-residents because quoted dividend payments are made including this notional tax, so you got exactly what the published dividend stated.

For non-residents dividends WERE what's called "disregarded income", that is, they were not subject to any tax other than that taken at source, if any. This was the case only if you did not claim a personal allowance.

For argument's sake let's call the personal allowance £10,000: a non-resident earning (as their only UK income for simplicity) £10,000 in dividend payments in the UK would claim their £10,000 personal allowance and not have to pay any tax. A non-resident earning £10,001 to any amount in UK dividends would not claim a personal allowance and pay no tax.

However this tax year the tax system on dividends has completely changed. The notional 10% tax at source has been abolished. Now UK residents are allowed to earn £5000 in dividends tax-free, and tax payable on earnings above this limit depend on what tax band you are currently in. Those paying basic rate income tax pay 7.5% on dividend income above £5000, those paying higher rate income tax pay 32.5% on dividend income above £5000, and those in the additional rate income tax bracket pay 38.1% on dividends above £5000.

It has not been made clear what the position of non-residents is in this new system. The simplest assumption is that, as a non-tax payer , i.e. you don't even come into the basic rate bracket, you would not be liable for any tax at all on dividends, which seems like a big advantage. But I don't know for sure because I can't find clear guidelines on any HMRC site so far...

Hopefully someone KNOWLEDGEABLE will post the answer.

EDIT to correct typo and non-resident definition for disregarded income purposes. Also just noticed my example doesn't make sense. It's only if your below £10,000 income was partially dividends and partially other income, for example rent, that you would need to claim a personal allowance. Otherwise all dividend income is just untaxed...

Brilliantly clear post ,and an example to people like Steve 73 not to make posts on complex technical matters based on "what they think" rather than what they know. I like your subtlety with KNOWLEDGEABLE which I think sends the same message !

[Jip99]

Thanks to Partington for post #17.

To add to the discussion, the 'accounting web uk' site had this:-

Disregarded income

santisuk | Fri, 23/10/2015 - 10:11 | Permalink

As Steve Kesby says, non-residents are effectively not liable to UK tax beyond the amount amount of any tax deducted at source (on dividend and other savings income only). Regarding dividend income, previously - and still in the current tax year - 10% tax was/is deducted at source by companies paying dividends, but that requirement to deduct tax at source placed on companies will be withdrawn with effect from 6 April 2016 as part of taxation on dividend income reform.

If the government does not introduce some special additional provision to replace that tax deduction at source for non-residents then it would seem that non-residents will in future be able to make investments via the UK and receive their UK dividend income gross with no further UK tax to pay. For those who have left the UK and have formally acquired non-resident status but still invest through the UK this is seemingly a significant gimme by the UK government. For instance this year I will suffer about GBP 7,000 of UK dividend tax deducted at source and for 2016/17 seemingly the equivalent amount will be zero. I live in a country (Thailand) which does not tax investment income earned abroad!

I am suspicious of a gimme like that. Has anyone heard of anything in the pipeline that might reinstate the government's tax-take on such income for NRIs. Anything in the Finance Bill that presumably is approaching finalisation or has recently been finalised (if the same timetable is adopted as when I was in practice)? I wait with bated breath!

For completeness I will note that:

1.Disregarded income for NRIs also includes savings interest income. I assume that banks and others will still be deducting tax at source on UK taxpayers so nothing changes on the tax position for that stream of income

2. Disregarded income is advantageous for those NRIs who have significant levels of UK dividend and/or other savings income. However you are not permitted a UK personal allowance if you go the disregarded income route. Accordingly for smaller amounts of dividend and/or other savings interest it is better to be fully taxed on such income (especially so now that there is to be a tax-free allowance on the first GBP 5,000 of dividend income next year) and claim the personal allowance.

HMRC will automatically select which route is beneficial for the NRI taxpayer (disregarded income or personal allowance) when a return is submitted, but obviously it helps to know how your tax is being computed.

[KittenKong]

My understanding is that the 10% dividend tax at source will continue and no one will be able to reclaim it (ie no change). But residents who earn more than a certain amount of dividend income will be liable to pay extra tax. This will not apply to non-residents (with no other taxable UK income) who will continue to receive their dividends paid minus the tax paid at source and who will continue to be unable to reclaim that tax.

So no change there for non-residents that I can see (at least not for those with no other source of UK income apart from dividends and interest).

The big change from April will be for deposit interest as it will no longer be necessary to use form R105 to have interest paid gross (or indeed to find a rare deposit taker who will accept that form) and all deposit interest will be paid gross (with reporting to HMRC) by default. This is a big improvement for non-residents.