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HMRC internal manual

Company Taxation Manual

Investment trusts: interest distributions: tax vouchers - example of alternative rules for providing tax information to recipients

Example

If a recipient has shares in an investment trust (IT) or prospective investment trust (PIT) and is a UK resident taxpayer who holds 100 shares with an equal split of dividends and interest, the following example shows the information that should be provided to the recipient under the new provisions in regulation 21(2) SI 2009/2034.

Example of generic information that should be sent to the recipient

  Shares
   
Date of payment 1 October 2009
Gross amount of distribution £100
Number & class of shares 100 A shares
Net amount of distribution/unit £0.90
Whether tax has been deducted Yes
Date of distribution 1/10/2009
% split between divs/non divs 50% dividends
50% interest

Electronic information made available to the recipient

On receipt of the generic information, the recipient should be given clear instructions on how to access the further information required to complete their return electronically or by an alternative method. Using the example above, the information below gives an indication of what information should be accessible electronically or by other means, with the necessary information required to complete a written statement emphasised in bold (as set out in CTM47575).

For 100 shares

Date of payment 1 October 2009

Gross amount of distribution = £100 (£50 dividends and £50 interest)

Actual amount received = £90 (90p x 100 shares)

The actual amount received is made up of:

  • £50.00 dividends (This should be entered onto your tax return in the box relating to Dividends from UK companies)
  • £40.00 interest (This amount should be entered onto your tax return in the box relating to income from UK bank, building society, unit trust etc interest amount which has been taxed already, that is the net amount after tax)

The dividends have a 1/9 tax credit of £5.56 which will satisfy any liability to basic rate tax.

The interest is the amount after basic rate income tax has been deducted @20% of £10.