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Is it correct to ignore DRIPs for UK income tax purposes?
I have taken on a client who is UK resident and domiciled. They receive substantial dividends from a quoted overseas company but these are reinvested automatically by the company. I assume that the client must have signed an agreement to this effect in the past but he has no documents or recollection of the fact.
The client’s previous adviser who has now died had not reported the dividends on the basis that they were overseas dividend reinvestment plans (DRIPs). I note that ITTOIA 2005 s 410 charges stock dividends on UK resident companies and I assume that since the DRIP is from a non-resident company it is correct to ignore the DRIP for UK income tax purposes.
Can readers provide any guidance?
Query 19 245– All Double Dutch.
Reply by ANA
Apportionment needs to be done for each dividend individually
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