Are share dividends considered income?

lineswilldance

Hello,

Just wondering what people think? Are Share Dividends considered income as I am filling out a form which asks for my monthly income but my share dividends only get paid to me roughly every 6 months? Not sure what to put. My last tax dividend was £18.79 and the tax credit on it was £2.09. It also says on my last Dividends vouchers "This voucher should be kept safe as it will be accepted by HMRC as evidence of a Tax Credit". What does that mean? Anyone know?

WILDERNESS

Are Share Dividends considered income?

They are considered as revenue income rather than capital gains. You should visit the Inland Revenue website hmrc.gov.uk". Check out Self Assessment and your tax return. Search for "Do you need to complete a tax return?" or call them.

My last tax dividend was £18.79 and the tax credit on it was £2.09. It also says on my last Dividends vouchers "This voucher should be kept safe as it will be accepted by HMRC as evidence of a Tax Credit". What does that mean? Anyone know?

If you do self assessment for tax purposes it's evidence that you have paid tax on your income.

Xbigman

It depends what form is being filled out. If you are claiming benefits then dividends are definately considered income.
If you are filling out a mortgage application or loan application then they should not be included in your headline income figure because you might sell the shares. If there is a section about other sources of income you could mention them there. My last loan application was only interested in my salary, nothing else got a look in.



Darren

blackcloud

Thanks for the replies. Its a form I a filling in from a Charity asking for help with an issue I have and it asks about what all my income is (monthly) well my dividends are not monthly every 6 month they put it into my bank account? So I am not sure whether to put them in or not?

real1314

blackcloud wrote: »

Thanks for the replies. Its a form I a filling in from a Charity asking for help with an issue I have and it asks about what all my income is (monthly) well my dividends are not monthly every 6 month they put it into my bank account? So I am not sure whether to put them in or not?

Dividends would be income; Shares would be capital.:cool:

Owain_Moneysaver

If you are getting 2 x £18 a year (interim and final dividends) then that's £36 a year or £3 a month on average.

Biggles

I wouldn't include them. When the shares go xd, the share price drops by the same amount as the dividend; it's just your own money you are paying yourself.

Pachira

I beg to differ - dividends are not "your own money you are paying yourself" ... they are a redistribution of company profits to company shareholders.

mania112

Dividends ARE income.

http://www.hmrc.gov.uk/taxon/uk.htm

gadgetmind

The tax credit is because if you get £9 in dividends the revenue treat this as income of £10 with £1 in tax having already been deducted. You need to use the £10 figure for your income (so multiply what you receive by 10/9) and when working out if you're into higher rate tax.

Biggles

Pachira wrote: »

I beg to differ - dividends are not "your own money you are paying yourself" ... they are a redistribution of company profits to company shareholders.

Exactly - your share of the company profits, which would otherwise remain part of your share capital.