UK Share dividend income - taxed twice?

[Lee May]

I have always been confused about this subject: I receive sterling dividends each year, a small sum say £500 and there has been already witholding tax deducted before I receive the money of about 9 or 10%. I receive a tax credit certificate for this sum. When I declare the gross amount of these dividends in our Revenue self-assessment tax form 11, am I charged income tax on the full amount or is there any consideration given for the tax already paid as source? Should I be returning the tax credit certificate from the UK with my return?

Secondly, are these shares which are in my name (a 20% tax payer with some capacity left at that rate ) charged income tax at the lower rate or at my husbands higher tax band of 41% please?

Thirdly, is there any advantage in having them in both names income tax-wise? Thank in advance.

 

[extopia]

1. You should enter the net amount of the dividend, not the gross amount. At least that's what it says in the help files of the ROS Offline Application for Form 11.

2. If you are married filing jointly, you may enter as your own income and they should be taxed at your marginal rate. i.e. 20%

3. As far as I can determine, it can indeed be advantageous for shares to be in the name of the lower earner if he or she has unused amount in the 20% band (as the unused amounts cannot be transferred in their entirety to the higher earner).

I'd encourage you to download the ROS Offline Application from http://ros.ie and run the numbers for yourself.

PS I am not a professional in this area. If in doubt, ask your accountant.

 

[Lee May]

Thank you Extopia.

That is as clear as I have ever got it from a professional. I will do as you suggest and thanks for your insights into the joint name sole name issue. The most important thing is the tax planning regarding the divi income rather than succession planning at this stage. Only 40!