I receive dividends from UK-based closed-ended investment companies whose shares are listed on the London Stock Exchange. In Self-Assessment, could you tell me where these dividends should be reported, e.g. :
- In the “Dividends from UK companies” box, because these entities are registered as a public limited company with shares on the London Stock Exchange, or
- In the “Other Dividends” box because these entities also describe themselves as being approved investment trusts, or
- Somewhere else
Any references to applicable documentation or guidelines would be appreciated.
I hold shares in a UK-based closed-ended investment company who have proposed a sub-division of shares. It is expected that the sub-division itself will not affect the overall value of my holding.
If this sub-division goes ahead, could you tell me the Capital Gains Tax implications of this (as well as any other tax consequences)? Specifically:
- Whether the sub-division would be considered a disposal?
- If the sub-division is not considered a disposal, how would allowable cost be calculated for any future sale (including for a partial sale of holdings) as the number of shares would be different to that originally purchased?
Any references to HMRC documentation on the above would be appreciated.
Many thanks for the guidance on tax treatment of return of capital from a UK-based, closed-ended investment company which may be winding down. Can I just check a few things:
- If a capital distribution is made, is this subject to Capital Gains tax only and not Income or Dividend tax?
- Is it the gain (or loss) only which is subject to Capital Gains tax (which may use any available annual allowance for this), and not the overall amount of the capital distribution received?
Also, it is not yet known if some of the capital distributions from winding down of the investment company would be considered "small." Can you clarify the following just in case this applies:
- Do the rules regarding small capital distributions apply to the winding up of an investment company (as all of the share capital would eventually be distributed, but this may be done in a series of amounts some of which may be "small")?
- CG57835 (penultimate paragraph) states that "If the taxpayer would prefer to treat a small capital distribution as a disposal, this treatment may be acceptable." Can you clarify if / when this should be applied (e.g. is there some other guidance / rules which are applicable here)?
- Is any tax applied to the actual small capital distribution itself (Capital Gains or otherwise), or would tax only apply once all of the allowable cost is used up due to small capital distributions being made (i.e. because allowable cost would be reduced by the amount of the small capital distribution, would tax only apply once all of the allowable cost is used up due to these small distributions)?
- Does a small capital distribution affect the Capital Gains annual allowance at all?
Can you also let me know whether the above only applies to holdings outside of an ISA (i.e. holdings in the same investment company held inside an ISA are disregarded in any associated Capital Gains or other calculations)?
Again, any further references and/or worked examples would be appreciated.
I hold shares in a UK-based, closed-ended investment company listed on the London Stock Exchange (although this investment company invests in assets from different areas of the world). The company has announced that it may be winding down (which could be subject to a shareholder vote) and, if so, would return capital to shareholders.
Could you tell me how a return of capital is treated for tax purposes and how this should be reported on Self Assessment? Also, how are any calculations affected if part of the capital is returned at different times?
Any references and/or examples from HMRC documentation would be appreciated.