tax_geek_34

Hi HMRC Admin 21, Unfortunately your reply directly contradicts what has been said further up by other HMRC replies. Please can you clarify what the position is? In my case the dividends were automatically reinvested. Thank you

In addition to Glen_Lethnot's question, please could you clarify whether the following understanding is correct: (1a) Are automatically reinvested dividends (under a DRIP) within a SIP scheme taxed when they exit the SIP scheme within 1-3 years? My understanding is that the originally amounts used to buy the dividend shares are taxed as dividends. It is handled as if all previous dividends are paid in the year that you exit the SIP scheme. Does this apply to both cash dividends and DRIPs? Please confirm. (1b) CGT will be payable on sale - this will be the difference between the FMV of the dividend shares on exit of the SIP and the sale price. Please confirm. (2a) If I receive dividend shares (under a DRIP, automatically reinvested) after I have left the SIP, my understanding is that these are not declared based on the answers above. Income tax is thus never due. Please confirm. (2b) CGT will be payable on sale - this will be the difference between the purchase price of the dividend shares and the sale price. Please confirm. Thanks

Facts: I resigned from my job in early 2024. My employment contract states that I have 1 month PILON. As part my resignation negotiations I secured an additional 2 months of pay, which has been treated as an extention of my notice period (from 1 month to 3 months). I have been subject to full tax and deductions for the last 3 months of pay, as the entirety is now being treated as a PILON. Question: In my view, the above treatment is incorrect. As the additional payments were negotiated as part of my departure, I understand that these should fall with in the GBP 30k tax exemption. The first month is a true PILON and should be taxed. My former employer disagrees with this view, as they are worried about their liability resulting from potential underpayment of tax. How can I resolve directly with HMRC?