PIDs instead of Divdends-Taxation

xylophone

It seems to me analagous to the case of those who receive "other income" from Halifax and Co-op by way of "rewards".

The tax is automatically deducted - those who are 20% tax payers don't need to take any action, those who pay at higher rate have to declare liability and pay it and those who are non - taxpayers have to reclaim it.

Judesman

Thanks for all your thoughts, I will see what HMRC have to say and post here IDC.

Judesman

I have at last got through to HMRC. The answer is that the £1000 personal allowance does not cover Property Income Distributions. So, presumably if you pay tax at the standard rate there is nothing more to do. I am not sure whether the tax deduction would qualify for exemption within an ISA

xylophone

The point is that the PID is not interest - it is "property income" - see my post 12.

Therefore it does not fall to be considered as interest under the "Personal Savings Allowance" - you can think of it as an amount added to your earned income/pension income and so the Personal Tax Allowance rather than the Personal Savings Allowance is applicable.



No tax is due on a PID received in an ISA - either the administrator registers for gross interest or (as in the case with Interactive Investor for example), the tax is reclaimed and received in the ISA six/eight weeks after the Distribution is paid.

Judesman

Thank you Xylophone. Just to clarify, there is a new Property Income Personal Allowance but this does not include PIDs.

xylophone

https://www.taxadvisermagazine.com/article/fb-2017-%C2%A31000-allowances-trading-and-property-income-clause-19


Property income allowance

The property income allowance will work in very much the same way as the trading allowance, with an exclusion of availability for rent-a-room income, identical election rules and similar allowance splitting provisions. The property income allowance will not, however, be available:

where the individual is entitled to a tax reduction in lieu of non-deductible costs of mortgage interest (the provision that is being phased in from 6 April 2017) or
in respect of income from an Authorised Investment Fund distribution or a REIT distribution

https://www.assuraplc.com/investor-relations/shareholder-information/reit-dividends-and-uk-tax


For UK resident individuals who receive tax returns, the PID from a UK REIT is included as other income. On the tax return, the total amount of the PID received is shown in box 17, the amount of tax shown as deducted on the voucher is shown in box 19 and the fact the income is PID should be included in box 21. (Box references are to 2016 return)

Judesman

Many thanks.

megabagger

Where do I enter this if using self assessment online ?

bowlhead99

megabagger wrote: »

Where do I enter this if using self assessment online ?

I can't be bothered to reset my passwords to log into the online forms to find whether thet box has the exact same names or how far down the form it is, but you can see the equivalent ones on the paper-based form SA100 and instructions SA150.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/700744/SA100_2018__1_.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/687369/sa150-notes_2018.pdf

For 2017 or 2018 the gross amount would go into

Box 17 Other taxable income (before expenses and tax taken off)


Per SA150, the figure to go in this box includes:
[etc etc]
Property Income Distributions (PIDs) from Real Estate Investment Trusts (REITs) and Property Authorised Investment Funds (PAIFs)
[etc etc]

Then you also need


Box 19 Any tax taken off box 17


Box 20 Description of Income: you could just say "PIDs from REITs" if that's the only reason you're using that box 17.