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Non-repayable tax on share dividends
TheGoldfish
Posts: 56 Forumite
in Cutting tax
Just a quick question concerning tax on dividends. I am currently not working and have not worked since Jan 2013. My annual income from interest and script dividends is less than my tax allowance so for the tax year 2013/14 I completed a form to recover the tax paid. I have been refunded the tax paid on the interest but have been informed that the tax paid on the script dividends is non-repayable tax.
Just wondered what the reason for this is. Is it just a HMRC rule? I must admit that for many years I thought tax wasn't paid on script dividends as it is not strictly a money payment.
Many thanks
Just wondered what the reason for this is. Is it just a HMRC rule? I must admit that for many years I thought tax wasn't paid on script dividends as it is not strictly a money payment.
Many thanks
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Comments
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Tax credits are available as a credit against your tax liability only I am afraid. If no liability - no repayment. The same applies to what are actually known as scrip dividends.There are 10 types of people in the world - those who understand binary and those who do not. :doh:0
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Many thanks for your answer
And thank you for correcting me. I think I've always called called it "script" but I won't anymore
.:beer:0 -
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And if you really want to know the history of "scrip" the wikipedia article looks quite interesting (using the term loosely).
http://en.wikipedia.org/wiki/Scrip0 -
TheGoldfish wrote: »Just a quick question concerning tax on dividends. I am currently not working and have not worked since Jan 2013. My annual income from interest and script dividends is less than my tax allowance so for the tax year 2013/14 I completed a form to recover the tax paid. I have been refunded the tax paid on the interest but have been informed that the tax paid on the script dividends is non-repayable tax.
Just wondered what the reason for this is. Is it just a HMRC rule? I must admit that for many years I thought tax wasn't paid on script dividends as it is not strictly a money payment.
Many thanks
This is because there isn't actually any tax deducted. It is a notional tax "credit", which grosses up the dividend amount so that it, in effect, will settle the tax for non-taxpayers and basic rate payers. Higher and additional rate have further tax liability.Stephen Covey once said that "when you teach once, you learn twice". That is the primary reason for my participation on the forums as an IFA.
Although I strive to provide accurate information in my posts, there may be the odd time when I fail. Yes I know it's hard to believe but even Your Hero can make mistakes. Apologies in advance.0
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