UK: Treatment of distribution as dividend not of capital nature determined under foreign law (Court of Appeal decision)
Turns on applicable foreign corporate law mechanism used to make the distribution
The Court of Appeal held in Beard v HMRC that whether a distribution received by an individual or trust from a non-UK resident company is a “dividend not of a capital nature,” and thus subject to income tax in the hands of the individual or trust, depends on the applicable foreign corporate law mechanism used to make the distribution.
Read a May 2025 report prepared by the KPMG member firm in the UK