Personal Self-assessment: Dividend declared in one financial year and paid in another

[7specialgems]

Apologies if this one has been done, but I've been digging around and couldn't find a clear answer.

I held a General Meeting on April 5th 2013 whereby I declared a Dividend ( last day of 2012/13 tax year).

I have dated the Dividend voucher with the date of declaration (April 5th 2013).

This dividend amount was transferred from the company account to the shareholder account via BACS on 15th April 2013 (9 days into the 2013/14 tax year).

Does the dividend get included on the 2012/13 Personal Self Assessment?

There seems to be disagreement over the context of when a Dividend is "paid" so I have used "declared" and "transferred" to try and clarify.

Thanks.

[ASB]

These might help.

SAIM5020 - Dividends and other company distributions: the charge to tax on UK dividends etc.
SAIM5040 - Dividends and other company distributions: company law
CTM20095 - ACT: General: Notes on company law aspects of dividends

But from you description it would appear 5th April; that it is the date on which it became payable (unless it was a final dividend and dependant upon what your articles say about dividends of course).

This might also be useful:-

http://www.accountingweb.co.uk/topic...s-right/470525

It was kind of you to lend it to the company for 9 days; an immediate book transfer into a nominal directors account would perhaps have been better.

If you peruse the linkas above when it is paid and when you physically receive the money are not necessarily the same thing.

[Martin at NixonWilliams]

Put simply..

An interim dividend declared by the director(s) is treated for tax purposes as the date it is paid, rather than when the meeting took place.

A dividend declared by the shareholders in a general meeting or AGM is treated for tax purposes as the date of the meeting.

I hope this helps.

Martin

[Bellona]

+1
The minutes of the meeting at which the dividend is declared say when it is payable. That is the relevant date for Tax Return purposes.

The date of payment should also be on the dividend voucher: which should contain information regarding the tax credit

If the minutes and voucher say 5 April 2013 then it's tax year 2012/2013

[psychocandy]

If you are squeezing one in at the end of the year, always a good idea to declare and pay at the same time. Prevents this hassle.

[7specialgems]

But from you description it would appear 5th April; that it is the date on which it became payable (unless it was a final dividend and dependant upon what your articles say about dividends of course).

The meeting was a General Meeting so I consider (correctly I think!) the Dividend to immediately be a Final dividend. It was voted for in the capacity of a Shareholder despite the vote taking place before final accounts were published (the Dividend was voted for on the basis that the company's profit to date had been determined).

The Company's policy is to pay dividend payments at the same time the payroll as administered, hence the payment on 15/04/13 following declaration at a meeting on 05/04/13. The dividend voucher was prepared the same day.

On the basis that the Dividend was a final dividend voted for by shareholding, then it sounds like the correct date for use on the return is 05/04/13.

[7specialgems]

Put simply..

An interim dividend declared by the director(s) is treated for tax purposes as the date it is paid, rather than when the meeting took place.

A dividend declared by the shareholders in a general meeting or AGM is treated for tax purposes as the date of the meeting.

I think the dividend is a final dividend because I termed the meeting as a Shareholder's General Meeting rather than a Director's Board Meeting.

Although this is despite the fact that the Company was mid way through its year at the time (accounts not published).

On the basis that the Dividend was declared following a review of the Company's known profits to date and that the Dividend was voted for by the necessary quorum of shareholders, is it correct that this dividend is Final and not Interim?

[7specialgems]

If you are squeezing one in at the end of the year, always a good idea to declare and pay at the same time. Prevents this hassle.

Duly noted for subsequent years

Unfortunately this wasn't a case of squeezing one in - the Company have been holding a General Meeting on the first Friday of every month since its inauguration and on this occasion this fell on the last day of the financial year.

[Martin at NixonWilliams]

I think the dividend is a final dividend because I termed the meeting as a Shareholder's General Meeting rather than a Director's Board Meeting.

Although this is despite the fact that the Company was mid way through its year at the time (accounts not published).

On the basis that the Dividend was declared following a review of the Company's known profits to date and that the Dividend was voted for by the necessary quorum of shareholders, is it correct that this dividend is Final and not Interim?

Providing you were able to demonstrate that the company had the reserves available at the time, and the paperwork is documented as you have stated above, the dividend will be treated as being paid in 2012/13 for tax purposes, which I assume was your aim by declaring a dividend on the final day of the tax year?

The 'final dividend' is the dividend declared in the AGM following completion of the statutory accounts. The terms 'interim dividend' and 'final dividend' are not important, it is the nature of the meeting that is, i.e. that it is voted for by the shareholders and not the directors.

[TheCyclingProgrammer]

Put simply..

An interim dividend declared by the director(s) is treated for tax purposes as the date it is paid, rather than when the meeting took place.

Can't an interim dividend can be considered as "paid" by means of journalling the amount to the director's loan account (and then withdrawn later) anyway, meaning an interim dividend can always be treated as paid on the date it was declared if you update your books accordingly?