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Dividends pre 5.4.2016

Dividends pre 5.4.2016

Hi all. Would you kindly clarify a point on dividends for me please? It may be tax effective for my clients to vote dividends before 5th April and keep them in a loan account to be drawn in future years. My query is, the divis will be declared on the TRs when they are drawn out but will they be subject to the new or old dividend tax legislation? Would be grateful for your comments.

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By Kevkava
26th Feb 2016 14:59

It's the date of payment which is relevant

It's the date of payment of the dividend that's relevant - this is the same pre and post 05 April. 

So if the dividend is paid by crediting it to a director's loan account on say 31 March 2016, it will come into the shareholder's 15/16 tax return. When they choose to actually extract that amount is not relevant.

Make sure all the paperwork is in place - board minutes, dividend counterfoils etc; and that there are sufficient post tax reserves at the time of the declaration.

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By JimFerd
26th Feb 2016 15:02

If they are properly declared and credited to the DLA on or before 5 April 2016, then they will be taxed in the 5 April 2016 tax year.

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By MGD
26th Feb 2016 15:15

Thank you  very much

Thank you  very much

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