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Box 4/5 for dividends from Investment Trusts

Practical Issues
mc2fool
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Box 4/5 for dividends from Investment Trusts

#243976

Postby mc2fool » August 13th, 2019, 12:05 pm

Was a bit surprised to get an email from Interactive Investors saying I now have an amended Consolidated Tax Certificate (CTC) for the 2018 Tax Year available for me, and on taking a look the only substantive difference between the new one and the one they issued back in May is that occurrences of "SA100 - BOX 4" have been replaced with "SA100 - BOX 4 & 5*" and the addition of a note saying:

"*If you have received any income from Investment Trusts, they will also be in UK EQUITY DIVIDEND schedule and are named as such. Income from Investment Trusts should be reported in Box 5. All other equity payments in this schedule should be reported in Box 4."

As it happens I've already filled in my 2018/19 tax return online, but not yet submitted it, so went to check and, of course, the online form doesn't refer to boxes, but under the Dividends section there are fields for Dividends from UK companies and Other dividends, and both the text on the page and in the help (clicking the blue question mark) say the latter is for dividends from unit trusts and open-ended investment companies, with no mention at all of investment trusts. Indeed, there's no mention of ITs in the help for Dividends from UK companies either, and as ITs are UK companies I'd always put their dividends in that field.

However, while the online form and help says Other dividends is for those from UTs and OEICs, the SA150 Notes 2019, page 6, says Other dividends is for those from UTs, OEICs and ITs.

So .................... :?

Dod101
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Re: Box 4/5 for dividends from Investment Trusts

#243986

Postby Dod101 » August 13th, 2019, 12:45 pm

I must say that I have always followed your practice of putting dividends from ITs in the general UK Companies box.

Dod

Parky
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Re: Box 4/5 for dividends from Investment Trusts

#244002

Postby Parky » August 13th, 2019, 1:51 pm

Dod101 wrote:I must say that I have always followed your practice of putting dividends from ITs in the general UK Companies box.

Dod


Me too.

Alaric
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Re: Box 4/5 for dividends from Investment Trusts

#244013

Postby Alaric » August 13th, 2019, 3:34 pm

mc2fool wrote:Was a bit surprised to get an email from Interactive Investors saying I now have an amended Consolidated Tax Certificate (CTC) for the 2018 Tax Year available for me, and on taking a look the only substantive difference between the new one and the one they issued back in May is that occurrences of "SA100 - BOX 4" have been replaced with "SA100 - BOX 4 & 5*" and the addition of a note saying:


Are any other Brokers doing this or is this purely an II interpretation?

If so, what are HMRC up to?

Rather uselessly the revised Tax Certificate makes no attempt to identify and separately sub total Investment Trust income, so on the face of it HMRC are imposing extra work on taxpayers for no good reason. Might be something to write to an MP about.

I keep my own running list of dividends received which I copy from the ii cash movements tab. That doesn't identify PIDs and foreign separately, so I move them to a separate schedule when I spot them. The end of year check is that total in my records agree with the ii statement as subdivided.

Alaric
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Re: Box 4/5 for dividends from Investment Trusts

#244018

Postby Alaric » August 13th, 2019, 3:53 pm

Alaric wrote:Are any other Brokers doing this or is this purely an II interpretation?


Just as a footnote, the commercial program "taxcalc" hasn't made any changes to its data collection. It still asks for the detail or total of UK dividends from Companies and then separately from OIECs/Unit Trusts.

BBLSP1
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Re: Box 4/5 for dividends from Investment Trusts

#244036

Postby BBLSP1 » August 13th, 2019, 5:13 pm

Had the same off II as well. Not very helpful of II on their part as they provide no meaningful explanation of what is going on but after a game of 'spot the difference' all I can see different is what mc2fool reports in the opening post.

I will forward to my accountant who has already submitted my 18/19 return - doubt they will be too bothered!

mc2fool
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Re: Box 4/5 for dividends from Investment Trusts

#244088

Postby mc2fool » August 13th, 2019, 8:52 pm

Alaric wrote:Are any other Brokers doing this or is this purely an II interpretation?

If so, what are HMRC up to?

II is the only one of my three brokers, ATS, II & IWeb, that has any helpful (?) notes on which boxes in the paper self assessment to put which types of income into, and actually this is the first year they're doing so; they didn't last year and TD didn't before them.

But I don't see it as an "II interpretation" issue. I've just checked the self assessment notes, "How to fill in your tax return", for the past 4 years and back to at least 2015/16 the notes say that dividends from Investment Trusts should be reported in Other dividends (box 5), along with those from UTs and OEICs. https://www.gov.uk/government/publications/self-assessment-tax-return-sa100.

However, the online form and help only says Other dividends is for dividends from UTs and OEICs, and I'm pretty sure it was the same in previous years. So, the issue is that the online and paper forms have different instructions ...

TedSwippet
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Re: Box 4/5 for dividends from Investment Trusts

#244106

Postby TedSwippet » August 13th, 2019, 10:14 pm

Can anyone tell me offhand what is the point of this box 4/5 separation anyway?

Pretty well every year, in online self-assessment, I initially put my UT and OEIC dividends in 'Dividends from UK companies' box 4, then later discover the error and move them to 'Other dividends' box 5 on review, and before submitting. It never makes even a shred of difference to my tax calculation.

I'm mystified then as to why this distinction even exists. Something subtle in here that I'm missing? Or just complexity for the sake of it?

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Re: Box 4/5 for dividends from Investment Trusts

#244121

Postby pochisoldi » August 14th, 2019, 12:48 am

TedSwippet wrote:Can anyone tell me offhand what is the point of this box 4/5 separation anyway?

Pretty well every year, in online self-assessment, I initially put my UT and OEIC dividends in 'Dividends from UK companies' box 4, then later discover the error and move them to 'Other dividends' box 5 on review, and before submitting. It never makes even a shred of difference to my tax calculation.

I'm mystified then as to why this distinction even exists. Something subtle in here that I'm missing? Or just complexity for the sake of it?


Probably to facilitate HMRC reconciliation of straight company dividends and OEIC/unit trust dividends which arrive at HMRC's steam driven computational facilities via different routes.

It may also allow HMRC to have one standard interface (from the dividend payers and taxpayers alike) for the income tax and corporation tax systems, which allows each system to handle dividends differently (e.g. franked and unfranked dividends for corporation tax, and just "dividends" for personal income tax).

TedSwippet
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Re: Box 4/5 for dividends from Investment Trusts

#244162

Postby TedSwippet » August 14th, 2019, 9:07 am

pochisoldi wrote:Probably to facilitate HMRC reconciliation of straight company dividends and OEIC/unit trust dividends which arrive at HMRC's steam driven computational facilities via different routes.

Thanks. So no tax reason, just HMRC convenience producing user inconvenience. (If this is the case, I'm willing to bet that they have a lot of reconciliation errors to sort through!)

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Re: Box 4/5 for dividends from Investment Trusts

#244522

Postby Lootman » August 15th, 2019, 1:22 pm

mc2fool wrote:Was a bit surprised to get an email from Interactive Investors saying I now have an amended Consolidated Tax Certificate (CTC) for the 2018 Tax Year available for me, and on taking a look the only substantive difference between the new one and the one they issued back in May is that occurrences of "SA100 - BOX 4" have been replaced with "SA100 - BOX 4 & 5*" and the addition of a note saying:

"*If you have received any income from Investment Trusts, they will also be in UK EQUITY DIVIDEND schedule and are named as such. Income from Investment Trusts should be reported in Box 5. All other equity payments in this schedule should be reported in Box 4."

I got the same message from II. I had already submitted my tax return and so I spoke to my accountant about it. He said to ignore the change since it doesn't affect the tax due.

Best to let the dog sleep.

mc2fool
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Re: Box 4/5 for dividends from Investment Trusts

#244524

Postby mc2fool » August 15th, 2019, 1:30 pm

Lootman wrote:
mc2fool wrote:Was a bit surprised to get an email from Interactive Investors saying I now have an amended Consolidated Tax Certificate (CTC) for the 2018 Tax Year available for me, and on taking a look the only substantive difference between the new one and the one they issued back in May is that occurrences of "SA100 - BOX 4" have been replaced with "SA100 - BOX 4 & 5*" and the addition of a note saying:

"*If you have received any income from Investment Trusts, they will also be in UK EQUITY DIVIDEND schedule and are named as such. Income from Investment Trusts should be reported in Box 5. All other equity payments in this schedule should be reported in Box 4."

I got the same message from II. I had already submitted my tax return and so I spoke to my accountant about it. He said to ignore the change since it doesn't affect the tax due.

Best to let the dog sleep.

Indeed, but presumably your accountant was already putting dividends from ITs into box 5 "Other Dividends" (or had instructed you to do so), as it seems that's been what HMRC have wanted for at least the last four years ... :D

scrumpyjack
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Re: Box 4/5 for dividends from Investment Trusts

#244549

Postby scrumpyjack » August 15th, 2019, 3:47 pm

Taxcalc puts all dividends from UK companies into Box 4. It is HMRC approved software.


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