This article relates to the Dividend and Interest Tax Report, which includes a summary of the dividends and interest received by your general investment account in the UK tax year.
You can find the report by going to the main menu and clicking on my profile icon:
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> Account activity and reports > Account reports > Dividend and Interest Tax Report
The article includes the following sections:
Purpose of the Dividend and Interest Tax Report
The Dividend and Interest Tax Report acts as guidance for submitting a tax return to your local tax authority. The report will only include any dividends and interest received by your General Investment Account (GIA).
The report is broken into 2 sections:
- UK Income
- Foreign Income
The report will be generated on an annual basis and will account for the previous tax year. It will be available on the platform, and you will receive a notification once it has been published.
Clients who hold only an ISA or SIPP will not receive the Dividend and Interest Tax Report, as these accounts are tax-exempt. The report will only include any dividends and interest received by your General Investment Accounts (GIA). If you hold both a GIA and an ISA, you will only receive this report if your GIA received dividends or interest in the previous tax year. If you do not have any funds or investments in a GIA, or if your GIA did not receive any income or interest over the previous tax year, you will not receive the Dividend and Interest Tax Report.
Understanding the Dividend and Interest Tax Report
Which currency is used in the report?
- All values will be converted to pounds sterling (GBP). The conversion rate applied will be based on the value date of the dividend or interest event.
What is included in the ‘UK Income Tax’ column?
- The column titled “UK Income Tax” specifies the amount of UK income tax that has been withheld by Saxo in accordance with prevailing tax regulations.
What is Equalisation?
- Equalisation payments represent adjustments received for income accumulated prior to the purchase of a new unit. These payments are not subject to income tax. Instead, they are incorporated into the initial unit cost, retuned through distribution, and should be deducted from the purchase price.
Interest on cash balance
- When receiving interest on cash you might have accounts with different currencies. Please note, all interest on cash amounts will be converted to GBP using the conversion rate at the value date.
What is accrued Gilts and Bonds Interest?
- When buying or selling a gilt or bond, accrued interest might be included in the transaction. This reflects the interest that has accumulated since the last payment which has not yet been paid out, thus affecting the valuation of the transaction. Accrued interest is not considered to be taxable until it has been received.
Where can I find a detailed breakdown of all dividends received?
- You can find a breakdown of all dividends received in the Share Dividend report. You can access this report using the following steps:
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- Make sure to filter the time period to the tax year as it is automatically set as year to date.
What are Stock Dividends and how are they reported?
- A stock dividend is payment made by a company to its shareholders in the form of additional shares. In cases where a stock dividend contains a fractional share, this portion will be reported as a cash dividend, as Saxo UK does not offer fractional shares. The following rules will apply to address the different types of corporate actions:
- Dividends received in shares will be reflected in stock dividends
- Dividends received in cash will be reflected in cash dividends
What are REITs / PAIFs and how are they reported?
- Dividends from securities classified as Real Estate Investment Trusts (REITs) and Property Authorised Investment Funds will be reported separately under this category.
What is included in the ‘Foreign Tax’ column?
- The column titled “Foreign Tax” specifies the amount of tax withheld by Saxo on behalf of the foreign country, in line with the country’s tax regulations.
Why are there multiple foreign dividend rows for the one country?
- Foreign dividend payments are grouped per tax percentage. When two dividends are received for different percentages, it will show up in two different rows, if they have the same percentage, then they will be shown as one row. Accrued interest is also found in a separate row.
- You can refer to the Share Dividend report for a complete breakdown of each dividend paid, including any tax withheld. You can access this report using the following steps:
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- Make sure to filter the time period to the tax year as it is automatically set as year to date.
How to report distribution from funds?
- Offshore fund distributions are categorized as either capital or income. This can be identified by establishing whether the fund is a "Reporting" or "Non-reporting" fund. The Dividend and Interest Tax Report does not provide information on income from offshore funds that can be classified as income of a capital nature. All income received from funds is shown as dividend income. This information is available from the fund manager or by checking the HMRC list of reporting funds.
- Reporting Funds: Distributed income is taxed as interest or dividends, depending on the fund's underlying assets.
- Non-Reporting Funds: Income distributed by the fund is taxed as income, which means the dividend and savings allowances do not apply. When selling units, any gain is treated as an "Offshore Income Gain" and is taxed as income.
What is Excess Reportable Income?
- Excess Reported Income (ERI) is additional income accumulated by the fund which is yet to be distributed. Please note that the Dividend and Interest Tax Report does not account for excess reportable income. Investors must report ERI on their annual tax returns, applying this based on their income tax band. You can access this information in the fund's annual report.
Why is the generation date of the report different to the date the report was downloaded?
- The generation date on the report will reflect the date the report was created, rather than the date you downloaded the report.
Why is the Dividend and Interest Tax Report not available in my account?
- If you are unable to view the Dividend and Interest Tax report, this could be because you have no savings or investments in a General Investment Account (GIA), or your account did not receive any income or interest over the previous tax year. If you have any queries regarding the report, please contact Saxo UK via the help center on the platform where you can contact us.