Dividend date change costs £3600

scarlet-pimpernel

Has anyone else been adversely affected by the early payment of dividends in the 2009/10 tax year?

My husband has been investing regularly in Foreign & Colonial IT for many years. The latest dividend was expected in May but has been paid at the end of March, putting 3 dividends in the last tax year. I gather this is to avoid the new 50% tax rate as a one off for the seriously wealthy. This is not applicable to us as my husband only pays tax at the basic rate.

On the face of it, it does not seem to matter too much BUT we are in a possibly unique situation.

We have 2 children at university. By careful money management we have managed to keep our income (husband’s new pension and a few savings) below the proscribed level for full maintenance grant and university bursary top ups. As our financial situation has recently changed we have been assessed on our estimated income for 2009/10.
We have just received notification and the corresponding Tax Certificate from Foreign & Colonial IT showing the early dividend payment. There was no warning of, or consultation on this change. The website still says dividends are paid in May.

This has taken us just over the limit and has cost us at least £1800 in bursary top ups (don’t know about repayment of maintenance and child tax credit grant yet). To make it worse, we will be assessed on this year’s income for the academic year 2011/12 giving a total minimum los of £3600.

There seems to be nothing we can do as the dividends have already been paid in the last tax year.

scarlet-pimpernel

Things are looking promising. After an email to the company concerned I had a useful reply from the company secretary to forward to Student Finance England. I am now waiting for the result.

barak

Hope this is resolved sensibly for you.

Quite a few other companies paid early dividends for the same reason, probably without realising the effect on you and others.

I imagine that some people will have been pushed into the higher rate tax band, and other older people may have lost part of their higher personal allowance for the first time. I somehow doubt whether they will get any concessions from HMR&C.

noh

scarlet-pimpernel wrote: »

Has anyone else been adversely affected by the early payment of dividends in the 2009/10 tax year?

...................
We have just received notification and the corresponding Tax Certificate from Foreign & Colonial IT showing the early dividend payment. There was no warning of, or consultation on this change. The website still says dividends are paid in May.
.......................

The 2009 Report and Accounts on page 1,3 and page 67 states that there would be a dividend payment on 31st March 2010 in lieu of the final dividend.

The Website is correct as future years dividends will be paid in May.

scarlet-pimpernel

Result! Student Finance (albeit the local council run version) have taken our plea into account. I have to assume SFE have done the same but am yet to hear.

It is impossible to work out their decision from the financial notices my 2 have received as they have their loans/grant based on different income levels and are sharing the pot.

I supose I just wait to see if number 2 gets his promised back dated bursary.