FAQ for Tax in the United Kingdom

Big highlight! :smiley:
The flexible ISA information does NOT apply to the T212 ISA.

Something else, would it maybe be worth mentioning that losses in an ISA cannot be used to off-set capital gains tax? (eg. Profits from a taxable investment account eg. the “Invest” account)

At least that´s how I understand it, please let me know if it is not the case :slight_smile: .

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UK investors to pay increased tax on dividend income

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To be honest, we probably knew something was coming. What gets me more is the point scoring. Some parties voted against it, which will happen, but what is the alternative to the funding gap really?

I’m Scottish and they moan it’s double taxing us. In reality anyone in Scotland earning more than 25k gets taxed more than their counterparts in England currently, but what they forget to mention, because of the Barnett formula, Scotland actually received more in taxes from England, than what it contributes(rant over).

For all of us, basically we just need to maximise the ISA/GIA/Dividend allowances.

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I have reviewed the information in this FAQ. All of it remains correct for preparation of the 2021-22 tax return. Allowances and rates are the same as in 2020-21. Going forward for the next tax year, 2022-23, all remains the same, except that tax rates on dividends are increasing by 1.25% (for the new social care levy), resulting in rates of 8.75%, 33.75%, and 39.35% for basic, higher and additional rate taxpayers, respectively.

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Here’s a puzzle. The HMRC web page Tax on dividends: How dividends are taxed - GOV.UK provides an example, about half way down the page, in which they are applying a tax rate of 8.75% to 2021-22 income. But I thought that the new social care levy applies only to income from 6 April 2022 onwards and that in the past tax year it remains 7.5%. Other websites agree with that. Is the HMRC website incorrect?

Update: Facebook message to me from HMRC just now:

Thanks for flagging this. I’ll ensure this is referred to the relevant team to correct the page.

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Heads up: next week we’re releasing a major update concerning the tax statements in the UK. Phase 1 of the project includes more detailed information that should ease the reporting:

  • Cover letter;
  • Self-assessment guidance;
  • Overview;
  • Dividend annex.

In the upcoming weeks, we’ll expand the list of documents above.

Afterwards, we’ll be focusing on improving the tax statements for the rest of the supported regions. I cannot provide an ETA for this, but any updates will be listed accordingly.

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hi, do we need to request this tax certificate or will it automatically be sent out? when can I request one with the new features? thanks.

You should contact our team and we’ll assist you further. The document is currently provided on demand.

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If you’ve held an asset for years and have got plenty of dividends from it in its lifetime. Maybe the overall gains would bring you in profit, even though the SP is in the red. Is this a tax loophole in that you can claim a loss on the capital gains part, even though you’ve made a gain considering the life of the investment.

I believe you only consider the cost of the investment (purchase of the shares) and the return from the sale, as you would have already paid taxes on the dividends (assuming they are greater than the threshold/annual allowance).

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If I have 20 invested yet 12 k is in a stocks N’ shares ISA do I have to do a tax return if I have done some sell trades (outside the ISA)?

For the record some of these trade have been capital loss.

@RumNCoke It depends on the size of your gains and losses. Use this to find out.

May have been mentioned before, but will T212 be getting to the point of paying US dividends without witholding tax like some other brokers? As it stands its still takes the 15%.

@Hbomb I pay 15% tax on my US dividends through this account, as a UK resident should. What do you mean?

@Dougal1984 Ignore me, my brains fried its only for SIPPs, in SIPPs you can get US divvies paid gross so 0% tax. Anyway wheres that coffee I clearly need…

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Fixed it for you :slight_smile:

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Hi all, what Withholding tax do we pay on dividends from Europe? France & Adidas specifically, thanks!

UK tax changes were announced today for 2023-24 and 2024-25 tax years. These will affect UK taxpayers holding shares in taxable accounts.

  1. Dividend allowance reduced from £2000 to £1000 and then £500,

  2. Capital gains allowance reduced from £12,300 to £6000 and then £3000.

Any dividends taking one’s total income above the boundary of £125140 will now trigger the additional rate dividend tax rate (39.35%) on the amount over that threshold. This boundary was previous at £150000. The difference between 39.35% and 33.75% is 5.65%. So the increase in tax on dividends is a bit greater than increase incurred by other income (45%-40%=5%) by those who have income now attracting additional rates.

No change to the £20k that can be placed in an ISA each year.

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Greedy UK government at it’s finest.

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