Taxes on dividends

I am getting very confused!
I am a dual US/UK citizen recently returned to the UK. Much of my income comes from dividends on ETFs, mutual funds and stocks held in the US. Apparently the US taxes these dividends at 15%. However I think my total income would put me in the bracket where dividends carry a 0% tax rate. Am I missing something? Also, should this type of income be re-sourced by treaty?

I’m in the same situation and unfortunately you effectively pay the higher of the country’s taxes for each category of income. As well as stock dividends I also have capital gains from the sale of stocks and can pay very little or no HMRC tax on these incomes but 15% to the IRS.

It is a maximum 15%; if you are in the zero percent bracket, the US tax would be zero. There still might be UK tax; but that is not the question you asked, is it?

Thank you. So does that mean that if the tax owed to the IRS is less than 15% of the total, then I don’t take any credit for UK taxes paid?

Thank you. So does that mean that if the tax owed to the IRS is less than 15% of the total, then I don’t take any credit for UK taxes paid?

I don’t think the actual % matters since some of your dividends may fall within the zero band and some in the 15% band.

Whatever IRS tax you pay on dividends can be offset by whatever tax you pay to HMRC on those same dividends.

At least I think that’s how it works.