QUESTION TIME
Your questions answered by a panel from Coopers and Lybrand
I am a small shareholder in the TSB, and pay tax at the top rate. My wife pays some tax at the standard rate. Is it possible to transfer my TSB shares to her and get some tax back on the 68p-a-share special dividend?
As your wife is a basic rate taxpayer, it is tax-efficient to transfer your holdings to her. The special dividend has not yet been paid and the record date, when your total registered shareholding is used to calculate the special dividend, has not been confirmed.
But for shareholders to qualify for the special dividend, they must hold shares from the record date to the merger date. Therefore, you risk not receiving the special dividend if you transfer the shares after the record date. If you transfer your shareholding to your wife after payment of the special dividend, she will be taxed at the dividend rate of 20 per cent.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies