Dividends Reinvested

[davey85]

Are dividends and interest distributions that are reinvested in SJP product taxable in the year that they occur if no funds received into bank account?

 

[Bobbo]

Unless it is an ISA, yes.

 

[davey85]

Thanks

 

[davey85]

When reinvested what is the difference between DRIPrice per share and the cash equivalent?

 

[Bobbo]

When reinvested what is the difference between DRIPrice per share and the cash equivalent?

Without sight of what you're looking at I can't be sure as I don't deal with DRIP, but I would assume:

price per share = cost of each share acquired with the reinvested dividend - this will be relevant for CGT on eventual sale of the shares

cash equivalent = amount you would have received in cash were you not opted into DRIP, i.e. the amount of dividend that is your income for tax purposes.

 

[davey85]

The below is what the transaction report shows on one line.

Script Dividend: 1 for 50.612244 at 372p
(cash equivalent: 7.35p per share)

Is the cost 372p or 7.35p when using as cost for disposal.

 

[UK Contractor Accountant]

7.35p per share is the dividend forgone amount.
372p is the cost price per share used for the bonus shares