Standard Life return of capital payment

[mrsblack]

I got a return of capital payment from Standard Life in November 2018.Does anybody here know how this is dealt with by the Impots. I assume it gives rise to a capital gain but I don't really know and, if so , where do I put it on the tax form. Thanks in advance. Mrsblack.

[cajal]

'Return of capital' is a payment from a security to an investor from funds that were not derived from net income. This is usually done because the underlying investments have not generated the annual income necessary to make the expected dividend payments to investors in a year.

Returns of capital are 'not considered income' and are therefore deemed tax-exempt.

I am in no way a tax advisor but given that your payment is not classed as income I would not declare it. DYOR. You could confim the above with your local impot.

[mrsblack]

Thanks, Cajal. I was on the Standard Life site which showed how to calculate a capital gain and that started me wondering. I was doing my research as I start on the declaration. I will be going down to the local Hotel des Impots later on. I do like to be as informed as possible before a visit to them. Thanks again. MrsB

[cajal]

Returns of capital enable companies to make a return to investors who would have expected a dividend payment but where the investment has not generated the return to enable a dividend to be paid.

The 'roc' replaces a dividend shortfall but does, however, de-value your investment by decreasing your original cost basis. If and when an 'roc' exceeds the original cost basis it then becomes a capital gain which you already know, from your post above, is declarable and taxable.

The impots should be aware of all this. Good luck.

[mrsblack]

Thanks again, Cajal.

I have calculated a capital gain and then went onto the impots site. Horrors. A form, a big form, but most of it is not relevant. The trick is, of course, knowing which bit. Anyway, I will go through it first and then when I am familiar with it I will go down to the Tax Office.

MrsB

[ferney01210]

Thanks, mrsblack, I'm in the same position as you - have you any information on how to fill in the 2074 form?

[pomme]

Did the Standard Life policy include an element of life insurance and was it based in the EU (so not IoM, Jersey, Guernsey, etc).? If so it would be treated more favourably for tax as an assurance vie rather than just an investment capital gain.

[mrsblack]

I worked out my capital gain ( plus-values) and there is a box or section 3 on the blue or pink form to declare the gain as a gross sum with no deduction or abatement if you accept the flat rate tax. Now on the 2074 I think it was page 2 and I ticked page 8 ( a bit about being an SI holder).Basically I went onto a French site for tax lawyers, maybe notaires, by googling remboursement de capital . Just checked I ticked on form 2047K Section 3 box 3VG 3UA -the gross gain, then cadre 3 the abatement - the reduction of 65% for holding the shares for more than 8 years. I claim no responsibility for the correctness of what I just did - it was all to the best of my knowledge at the time . The gross went into box 3VG on the 2042 main form .On 2042C Section 3 the plus values bit I put the abatement into Box £3Sg and the gross into 3UAand then we ticked Boxes 8SH and 8SI - vous n'etes pas a la charge d'un regime de securite sociale francais.well, , at least they know all about it everywhere and actually the actual tax amount is small. I handed the form in over a week ago, but kept photocopies. I don't think I could have handled this on line.

[mrsblack]

Thanks Pomme. To be honest I've no idea. The thought of going through the calculations again makes me , well, not, ill, but not a happy bunny. The actual tax will be , I hope quite small and Iam prepared to pay it as I am glad to get shot of the whole thing for another year. Thinking it over as I type this, I think you might be correct., Pomme. I now have to do battle with HMRC who have been taxing me on my total income instead of just my govt pension and I can only mentally deal with one tax outfit at a time. You will all maybe hear about the battle on the forum. Thanks again to all posters and all the best to those of us who are still dealing with the declaration.