Dividend Allowance on Tax Return

Aceace

krish123 said:

Aceace said:

krish123 said:

how do the rules differ if your are receiving dividends from an ISA account? do you have to declare this if its under £2000?

You don't need to declare anything from an ISA account. Everything covered by an ISA wrapper is tax free. 

oh really? even if the divi amount exceeds £2000?

Yes, even if the divi amount exceeds £2,000. In fact, even if the divi and capital gain exceed £2,000,000. Its all tax free and none of it needs to be declared. 

lindabea

Can I just check something on this topic.  When declaring the amount of dividend for tax purposes, do you first subtract the equalisation payment for group 2 units from the actual amount received and declare the balance. Or do you enter the amount actually received?  The way I understand it is that the equalisation payment is a return of capital and therefore not a dividend as such.  Can someone please explain further.  

underground99

lindabea said:

Can I just check something on this topic.  When declaring the amount of dividend for tax purposes, do you first subtract the equalisation payment for group 2 units from the actual amount received and declare the balance. Or do you enter the amount actually received?  The way I understand it is that the equalisation payment is a return of capital and therefore not a dividend as such.  Can someone please explain further.  

Correct - equalisation is not taxable income. Your tax voucher or consolidated tax certificate should tell you how much is dividend or interest income and how much is equalisation. The equalisation just reduces your investment cost.

lindabea

Thank you underground99 for confirming my understanding.   Great to have you on board!! 

TheAble

nirish said:

Thanks, now I'm on top of the situation that's exactly as it is!

Not that it a position to complain about, but I guess that's the curse of this mystical 100k+ tax black hole, effective income tax rate of 60% and now I realise both my £500 savings and £2000 dividend "allowances" are taxed at an effective 20% rate. 

Blimey! I didn't realise this.
Good knowledge to take into the next tax year...