scottish power shares

ReportInvestor

UK Dividends automatically have a tax credit of 10% & there is no further tax to pay for a basic rate taxpayer.

cloud_dog

FWIW, I've advised my mother that she does not need to do anything. As a basic rate tax payer, without any CGT considerations, she will - by default - receive the one off divident payment, and will not incur any additional taxation liabilities.

cloud_dog

msw_2

I really don't know anything about shares, so I'm sorry if this is a really stupid question but....if a basic rate taxpayer takes the dividend payout then they pay 10% tax on it. (I think)..are they not better off taking it as the capital payout and paying no tax (assuming they have not reached the CGT threshold)...?

ReportInvestor

The 10% tax has already been paid by the company to the government.

This "tax credit" can't be reclaimed by non-taxpayers, by charities or by your pension fund .

Thanks, Gordon.

msw_2

ok - i get it now.
Thanks