Vanguard ETF distributions April 2019

dales1

Beware, the April dividend is in the wrong tax year (unless I've completely misread something).
The distribution date is 10/4/19, compared with 4/4/18 and 5/4/17 etc.
So I will have only Three quarters' dividends in 2018/19 tax year whereas both I and HMRC have budgeted for Four quarters.



Dales


Edit PS also this means in the next tax year I may, or may not, have Five quarters' dividends. This might be tricky for crossing tax bands, and I cannot estimate for HMRC to any proper degree of accuracy.

ColdIron

Which Vanguard ETF?

dales1

All of them (including the monthly payers as well as quarterlies).
All paid on 10/4/19.
Including VWRL, VUKE, VMID etc.


https://global.vanguard.com/portal/site/loadPDF?country=global&docId=11632


Dales

triplea35

Could the 'Announcement' date (21/3/19) be the relevant tax point?

I read somewhere that George Osborne had clamped down on the practice of Directors declaring a dividend in one tax year but taking all or part payments in following tax year to make best use of their allowances. The date the dividend is declared is now the relevant tax point.

Just asking? Do your own research.

dales1

Thanks for the thought.

But according to Vanguard's published advice to UK taxpayers
"Cash distributions are taxable on a ‘receipts basis’ which means they are taxable as
received (i.e. on the pay date in the tax year in which they are received)."

talexuser

The day you get the money is the relevant tax year. Thanks, I have Europe ex UK, Japan, and North America and had counted these in the 18/19 tax year for my HMRC estimates as well.

londoninvestor

talexuser wrote: »

The day you get the money is the relevant tax year. Thanks, I have Europe ex UK, Japan, and North America and had counted these in the 18/19 tax year for my HMRC estimates as well.

It's the day that the company states the dividend as being due.

Let's say that on 1st Feb, the company announces that the dividend will be paid on 10th April. Your platform then takes 10 working days to pay it to you (which is realistic for Vanguard) and the cash isn't available to you until 24th April.

Your dividend is taxed as if you received it on 10th April - not 24th April.

In this example it doesn't really make a difference. But say the dividend was declared as payable on 1st April 2019 by the company, and you actually got the cash in your account on 15th April 2019: the income would be taxable in 2018/19, not 2019/20.

https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim5040

HMRC_manual wrote:

The date when a final dividend becomes due and payable is usually established by a resolution of the company. The dividend becomes due when the date on which it is expressed to be payable arrives. Only then is payment enforceable. In the case of a final dividend where a date for payment is not specified, an immediately enforceable debt is created so that the date of declaration of the dividend is the due and payable date.

...

The main case law authority for the above propositions is Potel v CIR (1970) 46TC658 which emphasises that the declaration of a dividend by a company and its payment are two separate matters.