P55 and sale of shares

baz8755

I recently took my first UFPLS payment and had to fill out a P55 to get my tax back.

I noticed however that despite my careful budgeting I had inccured a tax penalty.

I checked online and my tax code is BRX, which I guess is fine but I have incurred a £900ish Dividend tax.

I can sort of understand where this came from as I was advised by a helpline person at the HMRC that as I had sold £2,500 of shares I would have to put it in the Dividend box on the P55.

However it was my understanding that I could sell up to £3k of shares tax free.

How do I resolve this and how should I have declared these funds?

eskbanker

You'd need to clarify exactly what you're referring to - the £3K exemption you mention relates specifically to capital gains tax, which is a separate matter from dividends subject to income tax, for which there is also an allowance (aka a nil-rate band of taxable income), but a smaller one.

So, how much dividend income did you receive during the year in question, and (separately) what capital gains did you crystallise?

DRS1

I can sort of understand where this came from as I was advised by a helpline person at the HMRC that as I had sold £2,500 of shares I would have to put it in the Dividend box on the P55.

That sounds wrong.  The sales proceeds are not dividends (unless the sale was structured in a most unusual way) - though you may have had dividends from the shares.

baz8755

DRS1 said:

I can sort of uniderstand where this came from as I was advised by a helpline person at the HMRC that as I had sold £2,500 of shares I would have to put it in the Dividend box on the P55.

That sounds wrong.  The sales proceeds are not dividends (unless the sale was structured in a most unusual way) - though you may have had dividends from the shares.

I agree, I think the HMRC representative I spoke to did not understand what I was asking. I have updated this value to zero on the online portal and await the outcome.