IT income - 'dividend' or 'savings' income for tax purposes??

[Alaric]

Isn't it best to hold REITs in an ISA? Then not only do you not have to worry about their special tax treatment, but ISAs can still reclaim a tax credit for REITs in the way that they used to be able to do for ordinary shares?

Depending on how the ISA provider's nominee structures the holdings, the ISA account either gets credited gross to start with, or will be credited net and then it later should get the tax reclaim.

[AleisterCrowley]

?! Still find the HMRC wording confusing/ambiguous

The more I deal with them the more I believe they do it deliberately.

Obviously it can't be in order to keep their helpline people in work, because they don't seem to have any now, but it seems to help support an industry of advisers, experts, loophole finders, loophole closers, etc etc.

Or perhaps like many Govt depts, they like to keep things ambiguous in case they change their mind.

Dr"got 2 letters from pension providers today with revised payslips and my new tax code, which HMRC hadn't bothered to tell me about"F.

In my last 'proper' job we used to convert all the contact/legal docs into flowcharts (which highlighted a few inconsistencies)
I'd like to see an HMRC tax simulator online- with explanations of why x = y+z

[BobGe]

My HSDL tax certificate starts with a section headed "UK Equities".

IIRC, HSDL (+iWeb) do not resolve interest, they just show it as a dividend.

Regarding the o/p: https://techzone.abrdn.com/public/inves ... ollectives

[DrFfybes]

My HSDL tax certificate starts with a section headed "UK Equities".

IIRC, HSDL (+iWeb) do not resolve interest, they just show it as a dividend.

Really??? So for someone like me who uses their personal savings allowance I could be paying tax on income because it is wrongly described on my Tax Cert?

[BobGe]

Really??? So for someone like me who uses their personal savings allowance I could be paying tax on income because it is wrongly described on my Tax Cert?

(Previous comment from my recollection - I could be wrong or things may have changed.)
That would depend upon whether any of your HSDL investments pay interest, and your own tax situation, of course.
Perhaps not so much 'wrongly' described, perhaps less adequately than might be desirable.

As an aside, where ITs and Funds are concerned there is also the matter where a distribution may be derived from both underling dividends and interest (e.g. a mixed fund). Made more complicated because it may be split into an income fund (distributing) and an accumulation fund (not distributing, obviously) with 'notional income'. Additionally there can also be the matter of trail commission... (But let's not go there!!)
Thankfully, most funds available to P/Is are fairly simply structured.

https://www.gov.uk/hmrc-internal-manual ... s/ifm03100

[Alaric]

As an aside, where ITs and Funds are concerned there is also the matter where a distribution may be derived from both underling dividends and interest (e.g. a mixed fund). Made more complicated because it may be split into an income fund (distributing) and an accumulation fund (not distributing, obviously) with 'notional income'. Additionally there can also be the matter of trail commission... (But let's not go there!!)

If we are talking ITs only, they don't pay trail commission, which has been abolished anyway. Also they only have one share class except for the now almost extinct concept of split capital trusts.

When you hold OEICs or Unit Trusts through a Broker, they are required to tell you how much dividend or income has ben paid to you even when it's only notional for accumulation units. The same applies if you hold them directly through the managers.

[daveh]

I've noticed a couple of the renewable infrastructure ITs have been splitting their dividend into an interest and dividend component. See:
https://www.investegate.co.uk/announcem ... rt/7941091

Dividend Declaration

The Company's Board of Directors has approved a dividend of 2.0 pence per share for the September end quarter. The ex-dividend date will be 28 December 2023, and the record date of 29 December 2023. The dividend will be paid on or around 12 January 2024.

Any such dividend payment to Shareholders may take the form of either dividend income or "qualifying interest income", which may be designated as an interest distribution for UK tax purposes and, therefore, subject to the interest streaming regime applicable to investment trusts. Of this dividend declared of 2.0 pence per share, 1.15 pence is treated as qualifying interest income.

I'm not sure what that means for tax purposes if held in a GIA*, fortunately I hold mine in an ISA. HSDL credited my ISA with two separate payments one for 1.15p per share and one for 0.85p per share, so they are treating them differently.

*edit to add, but as they call it interest and separate it out from the rest of the dividend I'm assuming it's treated as interest income and is taxed the same way as bank interest. I read the HMRC manual which left me non - the wiser, but seemed more aimed at the IT in defining what it could do.

[Alaric]

*edit to add, but as they call it interest and separate it out from the rest of the dividend I'm assuming it's treated as interest income and is taxed the same way as bank interest. I read the HMRC manual which left me non - the wiser, but seemed more aimed at the IT in defining what it could do.

You split the dividend on your tax return so that part counts against the interest allowance and the rest against dividends. If your Broker is well organised, they will split the payment and might even tell you which bit is which in advance of the end of tax year statement. Otherwise you have to track down the split on the Company's website. You get a similar problem with REITs that may split the payment into PID and regular dividend.

[gpadsa]

last year I took screen shots of how I completed each SA page.

probably bad form to comment on own msg esp. as not perfectly on topic - anyway did a 1st draft of 23-4 SA and last year's screenshots really helped, it took just over an hour mostly on autopilot

gpadsa

[mc2fool]

last year I took screen shots of how I completed each SA page.

probably bad form to comment on own msg esp. as not perfectly on topic - anyway did a 1st draft of 23-4 SA and last year's screenshots really helped, it took just over an hour mostly on autopilot

gpadsa

And for those that haven't taken screenshots, you can open another tab or window and in it Amend last year's return, at which point you can flick through each section to see what you put last time, just backing out each time and not submitting the amend....