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Reinvested dividend income

Client has dividend income but it is automatically reinvested into the existing scheme.

Client has dividend income but it is automatically reinvested into the existing scheme. I am aware the first £5k will be tax free (for 2017.18) and any remainder will be covered to an extent by the personal allowance. I'm pretty sure the fact that it is automatically reinvested into the scheme doesn't make any difference from a taxation point of view - but if anyone knows anything different to help reduce the tax please let me know! 

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17th Sep 2018 16:35

Which scheme?

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17th Sep 2018 17:40

Generally a dividend is the dividend, and reported regardless of seeing the cash.

Then the funds are used to buy new shares which adds to the purchase value in the asset pool.

So you have an income and an immediate share purchase, rather than a "nothing" as there is no cash received.

Obviously its an "it depends" based on what exactly the "existing scheme" might or might not be.

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to ireallyshouldknowthisbut
17th Sep 2018 20:08

ireallyshouldknowthisbut wrote:

Obviously its an "it depends" based on what exactly the "existing scheme" might or might not be.

IIRC also on whether it's UK - but I haven't dealt with this for ages so I stand to be corrected/updated.

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By Lkc77
17th Sep 2018 20:56

Thank you for your time. The scheme is just a ordinary share scheme (no VCT).

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