How to declare 'return of capital' from an investment on self assessment?

deejay_mike

I've received a 'capital distribution' from one of the stocks I own.  I'm not sure how to declare that on self assessment?  Should I treat it as dividend, capital gains or in any other way?

eskbanker

A CGT disposal rather than an income tax event:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg57800

Keith80

It's hard to say without more information, and this should not be construed as advice, but if no shares or units were disposed of it probably doesn't fit into the categories either of a realised gain or of income for UK tax purposes, but could be considered a return of capital that reduces your original cost basis such that when you do come to dispose of the shares you will record a commensurate increase in the realised gain that may be taxable if it exceeds any tax free allowance.

poseidon1

deejay_mike said:

I've received a 'capital distribution' from one of the stocks I own.  I'm not sure how to declare that on self assessment?  Should I treat it as dividend, capital gains or in any other way?

Identify the shareholding concerned. There will be supporting published  paperwork from the company indicating the likely tax treatment of the distribution for tax purposes. Some of these corporate events can be quite convoluted with regard to ultimate tax outcomes.

Bostonerimus1

There wouldn't be any tax on "return of capital", but there might be on a "capital gain".

wmb194

deejay_mike said:

I've received a 'capital distribution' from one of the stocks I own.  I'm not sure how to declare that on self assessment?  Should I treat it as dividend, capital gains or in any other way?

Which company? There’s usually a tax section in the related documentation that’ll give you an idea of how it should be treated.