Q&A October 2024

October 2nd 2024

Partner Kenny Adamson provides the answers in this month’s Q&A.

In which tax year do I declare my dividend payments?

Q. I receive dividend payments. The next dividend payment date is 25 April 2025. Would I include this in my 2024/25 tax return, or based on the payment date should it be declared in my tax return for 2025/26? I am unsure whether the relevant date is the announcement date or payment date.

A. Interim dividends are usually taxed on the date they are placed at the disposal of the shareholder, which is usually the date of payment. Final dividends are taxed when they are ‘due and payable’. If the date of payment of the final dividend is specified in the minutes, it would not become due and payable until the payment date.

Is tax payable if a buy-to-let property is gifted to our children?

Q. If I were to gift a buy-to-let property, what are the tax implications on my adult children? I would not benefit from any income from the property after the transfer.

A. As this property is a buy-to-let and not your main residence, you will be subject to CGT on the difference between what you paid for it originally and its market value on the date of the transfer. As you are gifting the property and your adult children are not paying you anything, they will not have to pay any SDLT. However, if there is a mortgage on the property, and they take over responsibility for the mortgage, this is deemed consideration, and there will be an SDLT liability dependent on the amount of the mortgage transferred.

What are the tax rules around Forces people letting their family residence?

Q. As a Forces family, we have been posted abroad, so we are planning to let our family home. Our house was purchased after we married, but in my name only. Are there any tax reductions applicable to our particular situation and can my wife, who is currently not employed but who would manage the property, claim the income from the property on a self-assessment, or would I need to set up a business to pay her?

A. Since you are in ‘job-related accommodation’, you are deemed to be occupying your family residence for the purpose of calculating principal private residence relief. Regarding employing your wife, this is possible, but according to HMRC, you can only pay her a commercial wage (i.e., what you would pay a third party), and she must declare her wages as taxable income.

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