Recent Dividends

Discussion in 'Accounting & Tax' started by Lam Thieu, 5th Oct, 2008.

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  1. Lam Thieu

    Lam Thieu Well-Known Member

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    I received some interim dividends. In the statement it says it's for the year ended June 2008.

    I'm suppose to put this into my tax return right?......even if I get the div credits in September.

    I'm just wondering, what if people have already submitted their tax returns and then these div statements come out....do they need to submit a variation or somethign?
     
    Lam Thieu, 5th Oct, 2008
    #1
  2. Rob G

    Rob G Well-Known Member

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    If you are an investor ...

    Just stick it in the tax year that the dividend was paid or credited or when the amount was set aside as reinvested.

    Cheers,

    Rob
     
    Rob G, 5th Oct, 2008
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  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    As Rob G said - dividend you receive in Sept 2008 will be declared in your 2008/09 tax return (ie next year).
     
    Simon Hampel, 5th Oct, 2008
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  4. OLI__

    OLI__ Well-Known Member

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    On a similar subject, what about Navra distributions for the April-June quarter that are received into your bank account in the second week of July?

    I'm pretty sure they appear on the annual tax statement for the previous year.
     
    OLI__, 5th Oct, 2008
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  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    Yes, they were earned on the 30th June - so should be included in your 2007-08 tax return
     
    Simon Hampel, 5th Oct, 2008
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  6. Lam Thieu

    Lam Thieu Well-Known Member

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    I just got another statement today saying the dividends was for the year ending June 2008?....it was reinvested....

    I'm confused....some of you are saying declare in last year's 2007/08 tax return whereas some say hold off intil 2008/2009?
     
    Lam Thieu, 6th Oct, 2008
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  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    Okay - you have to be very careful to differentiate between "dividends" earned from direct share holdings and "distributions" from managed funds.

    For direct shares there are three relevant dates - the most important for tax purposes is the "record date" which is the date that you "earned" the dividend. In your case, this was probably in September - you need to check the documentation you received about the dividend.

    You declare the income on your tax return based on the date you "earned" the dividend, which is the "record date" - for example if the record date of your dividend payment was 10th September 2008, then you declare that in your 2008-09 tax return.

    The other dates I mentioned are not relevant for tax, but for your information they are the "ex-dividend dates" (the date by which you must purchase shares to qualify for the dividend), and the payment date (the date you actually receive the payment).

    From the ASX website:

    For managed funds (like all unit trusts), they must pay out all income earned (or else pay penalty tax) to unit holders by the end of the financial year. This means that your final payment for the year will typically be calculated as of 30th June. You must own the units on this date to be paid the distribution - and it is effectively the "record date" as per when you "earned" the income ... even if the payment date (the date you received the cash) isn't until a few days (or weeks) later.

    Does this make sense?

    In both cases, it is the "record date" which is important to you for tax purposes.

    FYI - that bit about the "dividends was for the year ending June 2008" relates to the financial year the company made the profits from which they are now paying to you as a dividend. It does not relate to the date that you earned the right to be paid the dividend (which was probably in September 2008).
     
    Simon Hampel, 6th Oct, 2008
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  8. Rob G

    Rob G Well-Known Member

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    Yep ...

    Your managed funds are trusts and have an extra couple of months to work out their net income for the past year.

    Usually you are presently entitled to your share of net income at the year end - its just they don't know eactly how much that is. So you have to wait for your distribution statement which gives your entitlement.

    This is quite different from crediting a shareholder's amount which happens at the moment it is credited or applied for your benefit.

    Companies pay tax on their profits. From the after-tax income they might distribute dividends at any time at which point the shareholder is liable for tax.

    Cheers,

    Rob
     
    Rob G, 6th Oct, 2008
    #8
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