Tax on dividends - Help please?

INSPIRED

Hi - I am in the middle of doing OH's tax return and have to admit that I am always confused about tax on dividends.

OH pays higher rate so the tax payable on the £46.25 dividend is easy enough - 25% on the dividend total.

However, Standard Life completed a share consolidation in March 2015 and there is a dividend for that. Do I tax that at the 25% rate too?

Also, there is something described as a fractional entitlement of £2.96. Do I have to add that to my calculations?

These amounts are all small; do I need to declare them?

Help, please?

Thank you

booksurr

it depends whether he took the "cash" returned in the form of B shares (subject to CGT) or C shares (subject to income tax)

why do you think you do not have to declare ALL income received, even if it is "only" £2.96?

INSPIRED

Thank you, booksurr



"why do you think you do not have to declare ALL income received, even if it is "only" £2.96?"

It was only after I wrote that, I realised that it is 2016 that the first £1000 savings will be tax free.

They were "C" shares - so, is the tax payable on these calculated at 25%?

booksurr

INSPIRED wrote: »

They were "C" shares - so, is the tax payable on these calculated at 25%?

yes

you treat the receipt the same as any other UK dividend and you include the £2.96 as well. You will still have to declare any income received next year even if it is <£1,000. The difference is you won't pay tax on that £1k, but you still have to declare it.

surprised you haven't googled Std Life yourself?
http://www.standardlife.com/static/docs/2015/UKQA15.pdf

jem16

INSPIRED wrote: »

It was only after I wrote that, I realised that it is 2016 that the first £1000 savings will be tax free.

You're talking about dividends not savings though. The Dividend Allowance from April 2016 will be £5000.

Regardless though they must still be entered on the tax return.

INSPIRED

Thank you, "booksurr".

You are right, I should have looked at the Standard Life website. I am a numpty. An impatient numpty who knew that I would receive a succinct answer from this forum.

Kind regards

INSPIRED

jem16 wrote: »

You're talking about dividends not savings though. The Dividend Allowance from April 2016 will be £5000.

Regardless though they must still be entered on the tax return.

Thank you, jem16. I had not taken in the fact that the Dividend Allowance will be £5000. Not that it would affect us!

polymaff

booksurr wrote: »

yes

INSPIRED wrote: »

Thank you, jem16. I had not taken in the fact that the Dividend Allowance will be £5000. Not that it would affect us!

you treat the receipt the same as any other UK dividend and you include the £2.96 as well. You will still have to declare any income received next year even if it is <£1,000. The difference is you won't pay tax on that £1k, but you still have to declare it.

surprised you haven't googled Std Life yourself?
http://www.standardlife.com/static/docs/2015/UKQA15.pdf

You definitely have to declare it all - not the least as although tax may not be due directly on the first £5,000 of dividend income next year, dividend income may well increase your total income tax liability!

So much for a simplified tax system.

Spidernick

OP,

Your husband would have been better off receiving the Standard Life money as a capital gain rather than income, assuming he has no other capital gains in the year. It would then have effectively been tax free (as covered by the capital gains tax allowance), whereas now he has additional tax to pay on this.

I still think that the default for individuals with the Standard Life distribution should have been capital rather than income, as many people, such as your husband, will have been caught out by this.