On-Line self assessment. Newbie "dividends" question.

Mary_Hartnell

I suppose that the on-line system is really now the only way that the "ordinary" citizen can can pick their way through the twists and turns of such a complicated bunch of laws and customs.

The calculation of my first attempt was clearly wrong, when compared to my calculation on the back of an envelope - Partly my fault caused by different institutions reporting taxed interest in different ways and thus muddling up net & gross. (The Nationwide on-line does a good little summary, but my debit card reader "thingy" that checks that I still have the card and know my pin - is telling me it needs a new battery ?!? Other paper based institutions are hard at work minimising postal costs and not distinguishing between net & gross clearly. Though The Yorkshire BS deserves special mention for offering a free "ring-back" service - there is only so much I can take of being told how important my call is)

Anyway I am still a little confused about the "10%", tax on dividends - this must already (?) have been paid as corporation tax, but a notional 10% is taken off whenever a distribution is made to the owners of the profits?

For the the "squeezed middle" and the "asset rich but income poor" paying no tax or standard rate (20%) tax this dividend tax is deemed as satisfying any income tax obligation.

Am I more or less right so far ?

However the "Dividends" screen is split into two definitions; there are ordinary trading companies like (say) BT (British Telecom) and investment "companies" (organisations) such as Unit Trusts, OEICS (Companies rather than trusts) Investment Trusts (? )

I have got some of each, the dividend notification slips look similar, so I guessed, my guess did not seem to make any difference to the calculation.

Why do HMRC bother to split down the "dividend" category ?
Just to warn that some of the apparent return might include a return of the investor's own capital ?
Or is there some deeper statistical significance?

purdyoaten

Mary_Hartnell wrote: »

Anyway I am still a little confused about the "10%", tax on dividends - this must already (?) have been paid as corporation tax, but a notional 10% is taken off whenever a distribution is made to the owners of the profits?

For the the "squeezed middle" and the "asset rich but income poor" paying no tax or standard rate (20%) tax this dividend tax is deemed as satisfying any income tax obligation.

Am I more or less right so far ?

That would be correct!