Self Assessment and Dividend Payments

Molotov

When completing last years self assessment I can't see anywhere to declare dividends that have been paid net of tax or the tax already paid on them.

I don't want to add the amount on to other dividends that were paid gross.

In fact I want to claim the tax back as my total dividends received was less than the £5,000 allowance.

Anybody else in a similar situation?

Dazed_and_confused

There is no "allowance", all dividends which were taxable are still taxable just at a 0% tax rate.

What dividends have you received which have had deducted?

Molotov

Dazed_and_confused wrote: »

There is no "allowance", all dividends which were taxable are still taxable just at a 0% tax rate.

Yes there is, there's a £5,000 dividend allowance.

https://www.gov.uk/government/publications/dividend-allowance-factsheet/dividend-allowance-factsheet

But that wasn't the point of the question, rather it was how to treat dividends that are paid net of tax.

Dazed_and_confused wrote: »

What dividends have you received which have had deducted?

ICG Enterprise Trust.

Dazed_and_confused

When you complete your return you will find there is no allowance.

Dividends are taxable income just as they always have been and although the first £5000 are taxed at a 0% rate some people will find they actually have extra to pay as a result of having the dividends income. There are a variety of situations where this can happen but a fairly simple one affects high earners.

Wage £100,000
Dividends £5,000

Tax on dividends is £5,000 X 0% = £0 but because the taxable income is £105,000 the Personal Allowance is reduced by £2,500 which in turn adds £1,000 to the tax bill.

So an effective tax rate of 20% on the dividends.

Have you checked the relevant date of your dividend payment?

Some firms include an interest payment as part of their distribution.

What exactly have you received to show dividend with tax deducted applicable to 2016:17?

Molotov

Thanks D&C.

Dazed_and_confused wrote: »

Have you checked the relevant date of your dividend payment?

I don't have the certificate to hand but from memory it was June or July 2016, but certainly 2016-17.

Dazed_and_confused wrote: »

Some firms include an interest payment as part of their distribution.

That may well be the case, as all I can find courtesy of google is:

"The Company has elected to pay the dividend as an "income distribution" that reduces the tax charge payable by the Company."

If that is the case should I then include it in the box for interest paid with tax deducted?

Dazed_and_confused wrote: »

What exactly have you received to show dividend with tax deducted applicable to 2016:17?

I will have to check the certificate for the exact wording and post later.

Dazed_and_confused

I think it will depend on what the certificate shows but much more likely to be interest with tax than a dividend with tax (if relevant to 2016:17)

Molotov

Thanks.

I'll come back with the exact wording.

Molotov

Molotov wrote: »

Thanks.

I'll come back with the exact wording.

Consolidated Tax Certificate Income Distribution

Income credited in the period from 06 April 2016 to 05 April 2017

Dividends received:

UK Companies Income Distribution
Dividend(s) paid £x
Tax deducted at source £0.25x

Where x is the net amount received and the payment date was 20 June 2016.

taylornj

REIT's share dividends

http://monevator.com/how-property-income-distributions-pids-are-taxed/

are the only ones I know of taxed at the basic rate. They don't get treated as share dividends even if called share dividends, they get treated as income. It's a special case when the dividend allowance doesn't apply.

REIT's go under Other taxable income

https://www.gov.uk/government/publications/other-taxable-income-hs325-self-assessment-helpsheet/hs325-other-taxable-income-2015

You can only claim tax back on REIT's if income is below the personal allowance of £11,000.

Myself I have income from REIT's for 2016/17 of £237.33 tax of £59.33 as below the the personal allowance I should get a tax refund of £59.33, the normal dividends come to £5765.28 so £5000 is dividend allowance and pay 0% additional tax. The remaining £765.28 I am below the personal allowance of £11,000 so pay 0% tax on the whole £5765.28 + £296.66, interest £8380 received gross is below the personal allowance so 0% tax, I could make use of the £5000 savings starting rate 0% tax on interest. I should have paid £0 in tax but because of the REIT I've overpaid tax by £59.33.

polymaff

Dazed_and_confused wrote: »

When you complete your return you will find there is no allowance.

Dividends are taxable income just as they always have been and although the first £5000 are taxed at a 0% rate some people will find they actually have extra to pay as a result of having the dividends income.

FA 2016 includes clarification on this point, just because so many have misunderstood DA.

In summary, it says forget that DA exists when determining your tax status. Only consider it when optimising the distribution of aggregate PA.

It is ironic that - after 20+ iterations - HMRC's own assessment software STILL can't correctly follow this rubric :rotfl:

( Exclusion 70 in https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/653488/2017-exc-indi.pdf )