Dividend paid on different dates

In March 2016 Regis Group (Holdings) Ltd decided to pay an interim dividend of £40m to its two shareholders who were brothers. It paid £20m to one shareholder on 5 April 2016 and £20m to the taxpayer on 16 December 2016.

The taxpayer claimed the dividend was taxable in the year it was paid ie 2016-17. He was non-UK resident that year so it would not be subject to UK tax.

After an enquiry HMRC issued a closure notice on the basis that the dividend was taxable in 2015-16. The taxpayer appealed.

The First-tier Tribunal confirmed that dividends are subject to tax when they become due and payable. Further the shareholders should be treated equally. It found that the shareholders agreed the taxpayer’s dividend would be delayed into the new tax year and the taxpayer accepted the risk of it not being paid but relied on...