Paying tax on investments outside an ISA
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InvestInPoker wrote: »Thanks mate you are probably right. She said I would have to declare the tax paid so I guess that is on self assessment.
are you a higher rate payer?
do you already do self assessment?0 -
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InvestInPoker wrote: »no and no.
in which case you don't need to contact HMRC about anything unless you realise more than 11,000 in capital gains this year0 -
Interesting topic this as I have been confused in the past with this also and would prefer to avoid paperwork.
As a standard rate tax payer, I have a S&S ISA and SIPP, so if I opened a share account for example for Investment Trusts, as long as I did not sell and make a gain of over 11000 per year or recieve a dividend income of over 11000 I would not have to self access would that be right?
If I opened a standard share account additionally I could not see the selling or received capital gains being anywhere near 11000 per year so does this mean I would not need to self access if kept under this 11000?
I would like to have a small separate dividend type portfolio of Investment Trusts separate from my S&S ISA and SIPP and paperwork thoughts put me off.
Thanks0 -
takesyourchances wrote: »As a standard rate tax payer, I have a S&S ISA and SIPP, so if I opened a share account for example for Investment Trusts, as long as I did not sell and make a gain of over 11000 per year or recieve a dividend income of over 11000 I would not have to self access would that be right?
The £11k allowance is only for capital gains. Whether you need to declare dividend income via self assessment will depend on whether the income takes you into a higher tax bracket or not. See here:
http://www.which.co.uk/money/tax/guides/tax-on-savings-and-investments/dividend-tax/0 -
The £11k allowance is only for capital gains. Whether you need to declare dividend income via self assessment will depend on whether the income takes you into a higher tax bracket or not. See here:
http://www.which.co.uk/money/tax/guides/tax-on-savings-and-investments/dividend-tax/
Thank you for this, it is becoming clearer as the confusion over this made me forget this idea.
With what I would be investing and being a standard rate tax payer any dividend income I would still be within the standard tax bracket, so going by this then I would not need do anything unless it reached a time I would reach the higher tax rate, if at all?
Thanks for the link as well.0 -
takesyourchances wrote: »With what I would be investing and being a standard rate tax payer any dividend income I would still be within the standard tax bracket, so going by this then I would not need do anything unless it reached a time I would reach the higher tax rate, if at all?
That's correct. The 10% tax credit, which is deducted at source, takes care of any tax due as a basic-rate taxpayer. It's a bit convoluted. Incidentally, if you're a basic-rate taxpayer and your dividends from an income-producing investment trust portfolio won't take you into a higher tax band, then there's little benefit to them being in an ISA anyway. So your ISA allowance can be better employed if that's the case.0 -
That's correct. The 10% tax credit, which is deducted at source, takes care of any tax due as a basic-rate taxpayer. It's a bit convoluted. Incidentally, if you're a basic-rate taxpayer and your dividends from an income-producing investment trust portfolio won't take you into a higher tax band, then there's little benefit to them being in an ISA anyway. So your ISA allowance can be better employed if that's the case.
Thanks again and very good point regarding the ISA and there would be little benefit in me having this type of income producing investment trust portfolio in an ISA anyway if I would still be a basic tax payer.
My ISA portfolio set up I am happy to leave as it is and is majority Vanguard life strategy for the long term.
Now I understand this better I will look again at the fund and share account as I would like to start a simple few Investment Trust's separate and this has taken away all the confusion I previously had.
I would just need to research a couple of investment trusts to start with and keep it simple.0 -
Remember that if you already fill in a tax return (e.g. if you're self-employed), you *do* have to declare all your dividends and tax credits.0
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Remember that if you already fill in a tax return (e.g. if you're self-employed), you *do* have to declare all your dividends and tax credits.
Thanks for that, I am employed at the moment so I don't fill out a tax return.
This has been a great help this evening as I was over complicating what I thought needed done outside a tax wrapper in my circumstances for a simple few Investment Trusts separate.0
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