Investment Clubs Manual076

Investment Clubs Manual076 - Some useful tax questions and...

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Unformatted text preview: Some useful tax questions and their answers Here are some common questions received by the PIC Helpline - and their answers: Q Our club was set up In November. Therefore, should we complete our tax return at the end of the financial year (on 5 April) or at the time of our official birthday, November? A Make the return on 5 April as it should run parallel to the financial year, and it sets the club off on a clear path for future years. Q Our club has not actually sold any of the shares that we hold. Do we need to make a tax return at all? A It Is a requirement by law that Investment clubs disclose all income and gains to the Inland Revenue Even If your club has not sold any shares, you will probably have received dividends from the companies In which you hold shares It is advisable to fill in the relevant tax form and return It with a covering letter to your local tax office so they are aware of your existence. Q One of our members left the club three months ago. He cashed in his units and had made a reasonable profit. We are now completing our tax return but It seems unfair that we should be liable to pay capital gains tax and income tax when the member who has left paid none. A An Investment club is not taxed as a whole. Each individual member is taxed on their share of the club's income and gains, therefore the member who has left your club will not be let off'tax-free’as he will have to make a tax return declaring any profit made in the part of the year In which he was a member. When a member leaves the club treasurer should provide a ’snapshot’of their holding in the club at that point.The club should request an extra Form 185 (New) for the ex-member and pass It to him after filling In details of his holding. It is the responsibility of the ex-member to send the form to the Inland Revenue when he/she makes his/her annual tax return, October 2008 ProShare Investment Club THE MANUAL ...
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