Investment Clubs Manual072 - /’ 62 October 2008 4 Income...

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Unformatted text preview: /’\ 62 October 2008 4. Income tax is payable on dividends, although each dividend carries a tax credit of 10% i.e. 10% tax has already been deducted. The amount of the total dividend allocated to each member based on their percentage holding in the club is detailed on Form 185 (New). Tax credits should also be allocated in the same way. Members who pay basic rate tax will have no more to pay on dividends. Higher rate taxpayers have to pay an additional 22% (over the 10% tax credit) to the Inland Revenue at the end of the tax year. Non-tax payers are not able to claim the 10% tax credit back. 5. Income taxed at basic rate is that received at bank or building society accounts where tax is deducted at source. 6. Overseas income taxed at less than basic rate will apply where clubs hold overseas investments which will be subject to different tax regimes. The Standard Form Of Agreement Every Investment club has to complete a Standard Form of Agreement for each tax year and send two copies of it to the local branch of the Inland Revenue. It is a four-page form that details the club's trading activities during the year. An example of a completed Standard Form of Agreement can be found on PlC's investment club website, wwaraShareClubs.cauk Form 185 (New) A supply of this form will be sent to you by your local IR office. You will need two copies for each member. The club treasurer should complete the copies for each member. This is relatively easy because It is simply a two-sided A4 sheet. The front asks for details of the Individual member (name, address, Nl number etc). The reverse side of Form 185 (New) requires that the club detail all of those investments that have been sold in the year including the dates sold and bought, the price that was originally paid for the share and any shares acquired through rights or bonus issues, including broker’s commission and stamp duty etc. A batch of Individual forms Is sent by the treasurer to the local branch of the IR. The second copies of 185 (New) are given to the respective members who can, if appropriate, append them to their individual tax returns. ProShare Investment Club THE MANUAL ...
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