Tax on UK dividends

D

Daddy Ireland

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If I purchase UK shares are the dividends I receive paid without any deduction? Is this taxable then in full at my marginal rate with no annual allowance at zero tax ? If I purchase through Degiro do the dividends come in the post to me ? Thanks
 
Taking your questions in turn:-

1. There's no withholding tax applied to dividends paid by UK companies;
2. The dividends are subject to (Irish) income tax at your marginal rate;
3. Unlike the position in the UK, there is no specific tax free allowance for dividends in Ireland; and
4. I would assume dividends would be credited to your brokerage account.
 
Thanks Sarenco. Do you mean Degiro would operate as brokerage account holder. Thought they would be execution only. If I want the dividends as income stream do you know how do I get that .
 
The tax free allowance for dividends in the UK I think is tied up with ones personal allowance in the UK. My daughter is studying and working n the UK so holds a UK tax number and bank account. Not earning much so could she buy with my money and hold the shares I wonder or I presume she would still be considered Irish resident. As not earning an income in Ireland other than say UK dividend income would she just have to pay tax on the UK dividends at the lower rate of 20%.
 
Daddy Ireland said:
Thanks Sarenco. Do you mean Degiro would operate as brokerage account holder. Thought they would be execution only. If I want the dividends as income stream do you know how do I get that .
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Not sure I follow.

Dividends (or uninvested cash and the proceeds of any sales) would simply be credited to your account with your broker.
 
Daddy Ireland said:
The tax free allowance for dividends in the UK I think is tied up with ones personal allowance in the UK.
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No, there is a (tax-free) dividend allowance in the UK that is separate and distinct from any other personal allowance.

If your daughter is resident or ordinarily resident in the UK she might consider starting an ISA.
 
As my daughter I guess is entitled to inherit x amount from me I assume I need not have passed on and I could give her the money now to purchase the shares. Or am I barking up the wrong tree in my thoughts on keeping the tax to a minimum.
 
Thanks again. But I hope she will return in a couple of years when done with her studies. I thonknow the dividend allowance is 2500 per annum over therem
 
I have been doing some research and think I can do the following.
My daughter is now in year 4 of her course in UK and earns approx £8k in a part time job while studying on a full time course. I believe under Irish CAT rules I can gift her upwards of €225k at any time to include distribution of estate on death. So I think I could give her the money now to purchase a basket of UK high dividend shares yielding almost 6% on which the first £5k in dividend income would be tax free and the balance would only be subject to 7.5% tax. Should she return to Ireland to work of course she would have to declare the dividends here and pay tax at the rate appropriate to her salary in Ireland which will likely be 20% initially. Does this idea make sense to people or am I missing something important. Thanks.
 
Daddy Ireland said:
I believe under Irish CAT rules I can gift her upwards of €225k at any time to include distribution of estate on death.
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The current Group A CAT threshold is actually €310k.

Be careful not to fall into the trap of letting the tax "tail" wag your investment "dog".

Personally, I think selecting stocks for their dividend yield alone is irrational (although I accept that opinion is controversial on this forum). Also, I don't think it's wise to limit yourself to stocks issued by companies headquartered in a single country.
 
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