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My client is now on his third stockbroker in four years. The stockbroker always holds the investment portfolio as nominee.
On comparing the 2009/10 tax report of the current broker with those of the two earlier brokers a problem is apparent.
The first broker categorised one particular investment as ‘UK fixed-interest stock’ and reported the income received as UK interest (paid gross) on a UK corporate bond.
This was consistent with his contract note that showed accrued interest being purchased.
The second broker categorised the same security as ‘foreign stock’ and reported the income received as foreign interest paid with no deduction of foreign or UK tax.
The current broker categorised the investment as ‘UK equity’ and reported the income as a UK dividend with a corresponding tax credit.
For the three years in point the effective tax rates would be 40% of the interest received but 25%...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
