Questions about tax on UK dividends where shares are held by Davy

J

JMG

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Hi all.

I have a small number of UK shares in my Davy account. I can see on the transaction statement in my Davy account that I received dividend income on these. But what I am not clear about is whether Davy deducts any tax due on these (and gives to Revenue) from the dividend income received and then pays the balance to me or whether I am responsible for declaring and paying the tax to Revenue (i.e. on my annual return).

Can anyone here offer any insight on this? Thanks.
 
You are responsible for declaring all extra income - including dividends. The Tax Pack that Davy compile for you at end of year lays out all the info you need to declare (incl any tax withheld etc).
 
UK dividends used to be paid gross.

“Foreign” (i.e. non Irish or non UK) dividends suffered 20% Encashment Tax for which you’d get a credit in your Irish income tax return.

Post Brexit, UK dividends also suffer ET and the rate is now 25%.
 
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This is an example of what you will see on your Davy's tax pack.



So you declare €1466.05 as your gross income.

On the form 11, it goes in under
Foreign Income
Great Britain and Northern Ireland Dividends
Net Amount Received which is actually the Full Dividend Payment of 1466.05 (I assume)

And then put in the Irish Encashment Tax lower down on the Foreign Income section.

Brendan
 
Thanks all. Brendan, I don't think I received a tax pack from Davy, but I will double check. Maybe because my holiing is very samll I don't get one.
 
The Irish Encashment tax is 25% of the dividend payment

There may have been tax deducted by the British before they transferred the 1,466.05 euros, or rather £ 1,260, but you get no tax credits for that since the rules changed on 6th April 1999. It should be easy to work out the gross dividend by number of shares x dividend payment in pence
 
Thanks Brendan. I have logged into my account, but under correspaondence I see only the Client Asset Statements. Where in the account do you find the tax pack?
Under my Income statement in the account I can see the divident incoment, but it just gives the total amount of dividend income received, no mention of any encashment tax, or any kind of tax. As jpd suggested, I looked up the actual dividend amount paid by the UK company whoe shares I hold and calculating the gross dividend I should be due it appears that I received the full dividend income with no tax deducted. My calculation is not completly accurate since Davy convert the dividend to EUR before putting it into my account and I do not know the exact exchange rate Davy used. However, using the central bank GBP exchange rate on teh date the dividend was paid I get the same amount as appears on my Davy Income statement to within a euro or so.
 
Hi JMG

You should get the tax pack in around March for the previous year.

So if you are looking for it for this year's dividends, you won't find it.

Brendan
 
Thanks Brendan. I'm pretty sure I didn't get a Tax Pack, but I'll double check with Davy tomorrow. I'm looking for 2021.
 
Since I opened my Davy account back in 2019, I have never received a tax pack, despite having several dividends paid in to my account.

I simply get a net credit for the dividend on my Davy account with no explanation of the gross amount nor the amount of tax deducted. Why can Davy not show this on their statements? Gross Dividend less Tax deducted.

I also notice that it is taking longer and longer for dividends to be credited to my account.

Do Davy deduct the tax from the dividend themselves or is this done before Davy get hold of the amount?
 
I had to ask for tax pack the first time and then automatically happens every year after that - mine just arrived today actually - notification in my email and its there on the account.
 
Can someone just clear this up. Suppose I get a dividend of 1000€ from a UK/FTSE company. Davy’s withholds 25% Irish encashment tax. So I get €750 into my Davy’s account. How much more tax is due ? My accountant is telling me I must pay 52% on the 750. Is he correct?
 
The gross dividend is added to your total income - the tax is calculated on your total income and you get a tax credit for the tax withheld by Davy

The tax rate will depend on your level of income
 
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