Tax return query re. income from a unit trust

katejo

I am a standard rate tax payer usually taxed via PAYE and have no additional sources of earnings. My savings interest  from building society accounts for 2023-4 does slightly exceed £1000 but is nowhere near £10 K. As far as I can see from the questions answered here You do not need to send a Self Assessment tax return - Check if you need to send a Self Assessment tax return - GOV.UK I don't need to complete  a tax return but do I need to contact HMSO if dividends from my Unit Trust exceeded £2000. It appears to suggest that I do. There was no question specifically about unit trusts.

DRS1

This might help
Tax on dividends: How to report tax on dividends - GOV.UK
You may not need to do a self assessment return if the dividends are below £10k

PS It is HMRC - not sure there is an HMSO any more

TheGreenFrog

For 2023/24 you need to tell HMRC if dividends exceed £1,000 (as that is the dividend allowance for that year, has reduced to £500 for 2024/25).  For accumulating unit trusts and OEICs this will include the amount accumulated during the year (shown on the tax certificate from the broker).

katejo

DRS1 said:

This might help
Tax on dividends: How to report tax on dividends - GOV.UK
You may not need to do a self assessment return if the dividends are below £10k

PS It is HMRC - not sure there is an HMSO any more

Yes I meant HMRC!

katejo

TheGreenFrog said:

For 2023/24 you need to tell HMRC if dividends exceed £1,000 (as that is the dividend allowance for that year, has reduced to £500 for 2024/25).  For accumulating unit trusts and OEICs this will include the amount accumulated during the year (shown on the tax certificate from the broker).

That explains why someone else told me £500. thanks

katejo

TheGreenFrog said:

For 2023/24 you need to tell HMRC if dividends exceed £1,000 (as that is the dividend allowance for that year, has reduced to £500 for 2024/25).  For accumulating unit trusts and OEICs this will include the amount accumulated during the year (shown on the tax certificate from the broker).

Ok. I am now looking at my consolidated tax certificate which has 2 sections
 There is an amount paid/ reinvested for dividend distributions and a separate gross interest figure underneath paid/reinvested for interest distributions. Am I only concerned with the dividend figure paid/reinvested ? Both sections have a figure for equalisation. Thanks
 

DRS1

I think you can ignore equalisation - that gets deducted from your base cost when you sell so it is relevant for CGT not income tax.
I think you need to include the interest figure with the rest of your interest.

katejo

DRS1 said:

I think you can ignore equalisation - that gets deducted from your base cost when you sell so it is relevant for CGT not income tax.
I think you need to include the interest figure with the rest of your interest.

So I have to add the amount paid/reinvested in dividends to the amount paid/reinvested in interest distributions? If I have to combine the two, the total will be over the £1000 allowed. 

DRS1

katejo said:

DRS1 said:

I think you can ignore equalisation - that gets deducted from your base cost when you sell so it is relevant for CGT not income tax.
I think you need to include the interest figure with the rest of your interest.

So I have to add the amount paid/reinvested in dividends to the amount paid/reinvested in interest distributions? If I have to combine the two, the total will be over the £1000 allowed. 

Not quite.  Dividends are dividends and taxed at one rate (8.75% for a basic rate taxpayer - 0% on the first £1000 for 2023/4).  Interest is taxed at a different rate (20% for a basic rate taxpayer - 0% on the first £1000).  You said you had bank or building society interest so the interest distribution goes with that not the dividends.

katejo

DRS1 said:

katejo said:

DRS1 said:

I think you can ignore equalisation - that gets deducted from your base cost when you sell so it is relevant for CGT not income tax.
I think you need to include the interest figure with the rest of your interest.

So I have to add the amount paid/reinvested in dividends to the amount paid/reinvested in interest distributions? If I have to combine the two, the total will be over the £1000 allowed. 

Not quite.  Dividends are dividends and taxed at one rate (8.75% for a basic rate taxpayer - 0% on the first £1000 for 2023/4).  Interest is taxed at a different rate (20% for a basic rate taxpayer - 0% on the first £1000).  You said you had bank or building society interest so the interest distribution goes with that not the dividends.

So in effect I have nothing to actually declare on the dividends as it is 0% on the first £1000. My total is  lower. But I need to contact HMSO by Friday to declare the interest part? They will already have my other savings interest via PAYE. 

katejo

DRS1 said:

katejo said:

DRS1 said:

I think you can ignore equalisation - that gets deducted from your base cost when you sell so it is relevant for CGT not income tax.
I think you need to include the interest figure with the rest of your interest.

So I have to add the amount paid/reinvested in dividends to the amount paid/reinvested in interest distributions? If I have to combine the two, the total will be over the £1000 allowed. 

Not quite.  Dividends are dividends and taxed at one rate (8.75% for a basic rate taxpayer - 0% on the first £1000 for 2023/4).  Interest is taxed at a different rate (20% for a basic rate taxpayer - 0% on the first £1000).  You said you had bank or building society interest so the interest distribution goes with that not the dividends.

Thanks for your help. I managed to get through to HMSO on the phone today. I gave them my figures for dividends and interest and she agreed that it was just a tiny adjustment for the tax on the interest which she made.