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  • FIRST POST
    • Carter66
    • By Carter66 16th Mar 17, 4:30 PM
    • 1Posts
    • 0Thanks
    Carter66
    Tax on Dividends
    • #1
    • 16th Mar 17, 4:30 PM
    Tax on Dividends 16th Mar 17 at 4:30 PM
    Hi I am confused about the tax on dividends, I have had two different explanations from the tax office on not paying tax on reinvested dividends. (I am reinvesting all dividends to build my portfolio)
    Firstly by phone late last year I was told that if I was reinvesting my dividends and not keeping the proceeds to spend, I would not need to pay tax. Luckily this year I will be just under the limit.
    A couple of days ago on hearing about the 2,000 limit I decided to check again, so did so this time with the tax office online web chat. I was told any dividends received in cash weather I reinvested or not would be eligible for tax over 2,000. So I asked if I received the dividend as a scrip dividend would that make a difference, my reply was no tax if I received share certificates. I then asked about drip shares to which I think he was baffled and said I needed to speak to a technical advisor but theirs no one available.
    So if anyone can shed some light on the matter before I try the tax office again I would be very grateful .
Page 1
    • ermine
    • By ermine 16th Mar 17, 5:26 PM
    • 537 Posts
    • 754 Thanks
    ermine
    • #2
    • 16th Mar 17, 5:26 PM
    • #2
    • 16th Mar 17, 5:26 PM
    Looks like under the old regime DRIP was treated as if you got paid the divi and happened to go buy some shares with it.

    You have a 20k ISA allowance next year. There's a strong case to bed and ISA some of these to avoid the hurt of having to worry about this sort of thing, particularly if you are on the border of the 5k allowance, you'll be way over next year
    • marksmith125
    • By marksmith125 16th Mar 17, 5:54 PM
    • 17 Posts
    • 5 Thanks
    marksmith125
    • #3
    • 16th Mar 17, 5:54 PM
    • #3
    • 16th Mar 17, 5:54 PM
    Hi,
    I read your post and I think a tax advisor will guide you in a better way than anyone else.
    Thanks!!
    • RD69
    • By RD69 16th Mar 17, 6:18 PM
    • 26 Posts
    • 18 Thanks
    RD69
    • #4
    • 16th Mar 17, 6:18 PM
    • #4
    • 16th Mar 17, 6:18 PM
    If I understand correctly.

    Dividends in a wrapper (ISA, SIPP) pay no tax when they are re-invested.

    Dividends outside a wrapper, whether re-invested or not, have a tax charge.

    Said some bloke on the internet.
    • JohnRo
    • By JohnRo 16th Mar 17, 6:51 PM
    • 2,306 Posts
    • 2,046 Thanks
    JohnRo
    • #5
    • 16th Mar 17, 6:51 PM
    • #5
    • 16th Mar 17, 6:51 PM
    Dividends outside a wrapper, whether re-invested or not, have a tax charge.

    Said some bloke on the internet.
    Originally posted by RD69
    I agree, said another.
    'We can't solve problems by using the same kind of thinking we used when we created them.' ― Albert Einstein
    'Facts do not cease to exist because they are ignored.' ― Aldous Huxley
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