share dividends

[Graham1]

I would appreciate guidance;

Should I add share dividends to my CGT calculations?

Thank you.

Graham

[Instinctive]

Definitely not.

Dividends are income, in the same way as one receives interest from deposits in the bank and building societies.

Dividends are treated as top slice of your income.

Dividends are taxed at source and there is no further liability if all taxable income is within the basic rate band. However, to the extent any dividends enter into higher rate band, these are taxed at 32.5% less the credit for 10% tax deducted at source.

Ramnik
ramnikrp@hotmail.com

[Huw Williams]

The other answer is "definitely yes".

Ramnik is right to say that you should declare the receipt as income.

But if you are talking about scrip dividends, you also acquired extra shares and you should keep a note of the capital cost which you will need for the calcualtion when you sell the shares.

The cost of the extra shares is the dividend income (ie the value of the shares received instead of cash).


Huw Williams
Nottingham

0115 914 6846

enquiries@huwwilliams.co.uk