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Completing R185 Forms

Do I use Box 18 or 21 to report dividends?

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I am the executor for a deceased person's Estate

I have completed all tax returns and now to have prepare R185 forms for the residuary beneficiaries

All distributions took place within the 2020/21 tax year

Non-ISA dividends were received either from AIM listed companies or UK unit trusts only

Do I enter these in Box 18 or Box 21?

And (while I'm on) do I enter the net dividends (92.5% of the dividends) in the upper box and the tax deducted (7.5% of the dividends) in the lower box?

Thanks in advance for any assistance

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By richard thomas
30th Nov 2021 18:38

You are right to be puzzled, as I was when I did the same thing earlier this year as executor of my mother's estate.

The problem is that the year of payment to the beneficiaries and the year the income arose to the executors can be different, as it was in my case (20-21 income, 21-22 distribution). What the form is trying to with dividends is separate those arising in 2016-17 or later and those arising in 2015-16 and earlier, as the latter carried a tax credit but the former don't. So 2016-17 and later divs go in box 18 because they don't carry a tax credit and earlier ones in box 21. The stupidity comes in the rubric - "after tax taken off" (HMRC baby speak for "deducted") is misleading because no tax is "taken off" dividends - the executors pay at the div ordinary rate (7.5%) and that is what goes in the second box in 18 (quite what the "non-payable dividend rate" is in the rubric for 21 when they carry a tax credit is anyone's guess). The net dividend goes in the top box (that is what they mean by the stupid statement"after tax taken off" after "Dividend income".

It makes no difference whether the divs are from quoted companies, unquoted companies or unit trusts.

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By rjames
30th Nov 2021 19:09

Hi Richard

Fantastic!

You've confirmed everything I thought but as you say the language is a weird combination of technical and babyspeak

I am a qualified accountant (albeit not in practice) but the idea of getting it wrong in front of my family was a risk I dared not take ...

Thank you

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