bed and ISA between ex-dividend and dividend date

inflationiscoming

How are the dividends treated for tax?

Apodemus

Experts will be along shortly, but I would have assumed that the div was attributable to the earlier period and taxed accordingly, so not yet part of the ISA wrapper.

inflationiscoming

that is what I would have thought but hard to find confirmation on the internet, maybe it is too easy a question

Gareth1989

The dividend will be received in the account the holding was held on the ex-dividend date (or rather the record the date to be picky). It is where the holding was on the ex-date that dictates entitlement to a dividend, not where you hold a security on payment date.

CLAPTON

bed and ISA are two totally unrelated transactions for tax purposes


so if you sell shares after the xd date then you receive the dividend in the normal way i.e. is liable to tax

nothing to do with the ISA at all.

bowlhead99

Apodemus wrote: »

Experts will be along shortly, but I would have assumed that the div was attributable to the earlier period and taxed accordingly, so not yet part of the ISA wrapper.

Without considering myself an expert, I agree - I can tell you that if you receive dividends in an ISA they are not taxable, whereas if you receive them outside they are. That is one of the principal reasons of using ISAs in the first place.

Clearly if you sell the shares "ex-dividend", i.e. without the right to the dividend, then you will keep the dividend for yourself and it will not go to the person who bought your shares, it will go to you.

By extension: if "you, outside a tax wrapper" sell the shares keeping the right to receive a dividend on its payment date... and "you, inside a tax wrapper" buys the shares, ex- the right to receive a dividend... then your dividends are not going to magically appear inside the tax wrapper. They will arrive in your hands (or nominee account or whatever) and be taxable as normal. They do not know or care that you later bought the same type of shares in an ISA.