Dividends - Classification on Tax Return

[teecee90]

Can anyone assist with this please?

I received unsheltered dividends in 23/24 from City of London Investment Trust (CTY). Do these go in my tax return as "Dividends from UK Companies" or "Other Dividends" (dividends from authorised unit trusts and open ended investment companies)?

Or maybe it doesn't really matter which of these two boxes I use?

Thanks

[monabri]

iWeb provides an annual summary of dividends received in my taxable account. I received dividends from CTY and these are presented under the same classification as a dividend from, say, Shell or HSBC.

As do "Interactive Investor" but they say....

*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.


So, we will have to check what Box 4 and Box 5 are on the tax return!

Edit: (Copy of the section from a recent tax return with my numbers redacted!). Maybe I should have split out the IT dividends from the rest and entered the value into box 5 !

[mike]

I received unsheltered dividends in 23/24 from City of London Investment Trust (CTY). Do these go in my tax return as "Dividends from UK Companies" or "Other Dividends" (dividends from authorised unit trusts and open ended investment companies)?

iWeb provides an annual summary of dividends received in my taxable account. I received dividends from CTY and these are presented under the same classification as a dividend from, say, Shell or HSBC.

My CTY is held with Fidelity, and it is shown under "Other UK Dividends"

Fidelity split my Tax certificate into 3 sections
- UK Company Dividends
- Other UK Dividends with sub-heading Investment Trusts [*]
- Foreign Dividends with sub-heading of the country

* I do not hold OEICs or other "Other UK" types of income producing holdings so maybe there would be other sub-headings if this was the case.

All my ITs are in this "Other UK" section except for a Luxembourg based one which comes under the "Foreign Dividends" section

[teecee90]

Box 4 is "Dividends from UK companies"
Box 5 is "Other dividends"

[teecee90]

Just to add. I entered these dividends in box 4 last year, but am thinking it probably should of gone into box 5.

Edit - doesn't seem make any difference to my tax calculation whichever of these tow boxes I enter it in, so will probably go with box 5 this year

[londoninvestor]

Just to add. I entered these dividends in box 4 last year, but am thinking it probably should of gone into box 5.

Edit - doesn't seem make any difference to my tax calculation whichever of these tow boxes I enter it in, so will probably go with box 5 this year

Exactly the same for me.

In fact, HMRC now explicitly say that ITs should go in box 5. See page 6 of: https://assets.publishing.service.gov.u ... s-2023.pdf

[88V8]

Just to add. I entered these dividends in box 4 last year, but am thinking it probably should of gone into box 5.
Edit - doesn't seem make any difference to my tax calculation whichever of these tow boxes I enter it in, so will probably go with box 5 this year

Exactly the same for me.
In fact, HMRC now explicitly say that ITs should go in box 5. See page 6 of: https://assets.publishing.service.gov.u ... s-2023.pdf

I have always lumped them together in box 4.
Interesting... I wonder what the Chancellor is/was plotting?

V8

[londoninvestor]

Exactly the same for me.
In fact, HMRC now explicitly say that ITs should go in box 5. See page 6 of: https://assets.publishing.service.gov.u ... s-2023.pdf

I have always lumped them together in box 4.
Interesting... I wonder what the Chancellor is/was plotting?

V8

Actually, looking back, the SA guidance notes for at least the last 10 years say that investment trusts should be in that "other dividends" box, so I probably should have omitted the word "now" in my post.

It just isn't clear in the online self-assessment form itself, and of course an investment trust is a UK company. Not that it makes any difference to the tax owed, anyway!

[SalvorHardin]

I'm another one who puts investment trust dividends in box 4. As others have said, our key defence is that makes no difference to the tax, the form doesn't specify this and in any event investment trusts are UK companies.

Many accountants include investment trust dividends in box 4 as do some commercial software packages. Use box 5 for REIT property income distributions (to allow for the tax deducted form the PID).

HMRC has much better things to do than to get upset about this nonsense. They're going to be snowed under by people who now have to start do tax returns after many years of low interest rates because their deposit account interest now exceeds the £1,000 allowance (£500 for higher rate taxpayers).

[the0ni0nking]

I say this with no meaningful knowledge, but if it makes no difference to the tax paid, why have two separate boxes at all?

Is there any circumstances where it could make a difference or potentially made a difference in the past?

[genou]

I say this with no meaningful knowledge, but if it makes no difference to the tax paid, why have two separate boxes at all?

Is there any circumstances where it could make a difference or potentially made a difference in the past?

I believe it was for statistical purposes.

[Alaric]

I believe it was for statistical purposes.

How long ago? That box was abducted for use by Property Income Distributions, whch have had a different tax treatment ever since REITs were intoduiced. That was back in the days of Blair and Brown.

Surely HMRC know that the "IT" in REIT is a bit of a misnomer as these vehicles only have a superficial resemblence to traditional Investment Trusts.

[scrumpyjack]

Just to add. I entered these dividends in box 4 last year, but am thinking it probably should of gone into box 5.

Edit - doesn't seem make any difference to my tax calculation whichever of these tow boxes I enter it in, so will probably go with box 5 this year

Exactly the same for me.

In fact, HMRC now explicitly say that ITs should go in box 5. See page 6 of: https://assets.publishing.service.gov.u ... s-2023.pdf

I put it all in the "UK Companies" box. All my Investment Trusts are UK companies. Whoever drafted the HMRC notes obviously doesn't realise that!