Preference shares (paid gross or net)

[bullboy8]

If they are classify as franked investments, then do you get to claim back the 30% that the company paid in corporation tax? or is it 20% because normal dividend from ordinary shares are taxed at 10% at source.

I am a non tax payer, thats why i want to know. Thanks

 

[Bagehot]

On regular dividends you are not able to reclaim the 10% tax credit if you are a non-tax payer (something charities with investments have a big issue with), because it is credit against income tax due, not tax paid in itself. I am not absolutely sure about this, but I'm pretty certain that preference share dividends are exactly the same - non-tax payers lose out. You could always ring HMRC and ask: they're surprisingly pleasant when you call them...

 

[bullboy8]

From directgov:

"Can you claim the tax credit if you don't normally pay tax?
No. You can't claim the 10 per cent tax credit, even if your taxable income is less than your personal allowances and you don't pay tax. This is because Income Tax hasn't been deducted from the dividend paid to you - you have simply been given a 10 per cent 'credit' against any Income Tax due."

income tax not been deducted? My income isn't over the personal allowance.

if you can claim it back, can you offset it?

 

[dineshmt]

If they are classify as franked investments, then do you get to claim back the 30% that the company paid in corporation tax? or is it 20% because normal dividend from equity shares are taxed at 10% at source.

I am a non tax payer, thats why i want to know. Thanks

Hey could you brief me on what you managed to find out about this scenario?
I am facing a similar kind of problem and I want to know