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Are share dividends considered income?
Comments
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As long as the dividends are well covered, the assumption is that the company is making enough investment to keep the future dividend stream rising with inflation.
Of course, a company could be skinny with the dividends, and claim that they know better how to spend this money that we do, but this is only really true for high-growth companies.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Exactly - your share of the company profits, which would otherwise remain part of your share capital.
you're focusing on the day on which a dividend is paid.
if you look at the whole year, the company makes profits and pays dividends using part of those profits*, so the dividends you receive are not something you already owned at the start of the year. in other words, it's income.
(*unless the company didn't make profits this year and paid a dividend anyway - which is not the usual case.)0 -
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.
It's a shame HMRC don't see it like that. Try explain to them why you've not declared them on your tax return "because its already my money" and I think you'll be facing a few penalties.
To the OP, declare them as they are income and to avoid any possibly problems at a later date with your application being considered to be fraudulent.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Keep your shares in an ISA and have your dividends paid to the ISA. Keeps them out of the tax system altogether.British Ex-pat in British Columbia!0
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Keep your shares in an ISA and have your dividends paid to the ISA. Keeps them out of the tax system altogether.
Good advice in general, but the tax efficiency of dividends means that it's often worth keeping income generating assets in S&S ISAs and dividend and capital gains generating ones outside of these wrappers.
It's all down to looking at annual subscription restriction limits and your individual/family income and tax situation.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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