Form 2047 - dividend credits query re line TA

[suein56]

OK here's the problem -  I've got dividends which I have reported on page 2 section IV A - dividendes éligibles à l'abattement de 40%. I have a tax credit value for these.

But I also have some investment trust dividends on which I have paid an unreturnable 10% tax  in the UK - so can I put these in section B - autres revenus de valeurs immobilières et revenus assimilés - where they would appear to go in 'dividendes non éligibles à l'abattement de 40%'?

Is this right?

If it is then I have a slight problem, as following the steps through on both sections A & B, I seemingly end up with 2 different values to be reported to line TA- one from section A and a different one from section B.

Do I add these two values together and put the total in line TA? Can the answer be that simple?

Can some kind person please give me the benefit of their experience and advise me as my head is spinning.

Thank you.

Sue

[suein56]

Thanks to anyone who read this post, but as noone has felt able to reply obviously an email to my tax office is the next step. I only hope my written French is up to this.

Fingers crossed.

Sue

 

 

[londoneye]

Sorry I can't help at all Sue.   Just to say, you are not alone, as no-one has answered my query either.

I think, understandably, everyone is all 'taxed-out'!!!

[suein56]

[quote user="londoneye"]

I think, understandably, everyone is all 'taxed-out'!!! [/quote]

LOL, I think you might be right!

Sue [:)]

[Benjamin]

It may also be that the people who are normally au fait with this type of tax question just do not have the expertise to give a 100% answer.

Being steady and regular sort of peoples [:D] they are being hesitant to speculate an answer which may constitute of nothing more than an educated guess.

[suein56]

[quote user="Benjamin"]
Being steady and regular sort of peoples [:D] they are being hesitant to speculate an answer which may constitute of nothing more than an educated guess.
[/quote]

Yes, I think you may be right. But I feel it was worth asking nevertheless.

Thanks anyway.

Sue

[allanb]

[quote user="Spg"]...investment trust dividends on which I have paid an unreturnable 10% tax  in the UK...[/quote]I would help if I could.  I'm sure several others would, too.  My problem is that I don't know what this means.

Either it's something I'm not familiar with, in which case I can't help you, obviously.  Or it's an inadequate description.  What's the "unreturnable 10% tax"?  If you paid it, you must have a tax demand or assessment or something that describes it.  Why do you call it "unreturnable"? 

If it was a dividend paid by an investment trust, I would have thought you would get a voucher showing a tax credit.  But in that case, it would be treated in the same way as any other company dividend.

The more specific you can be, the more likely you are to get an answer. 

[suein56]

[quote user="allanb"][quote user="Spg"]...investment trust dividends on which I have paid an unreturnable 10% tax  in the UK...[/quote]I would help if I could.  I'm sure several others would, too.  My problem is that I don't know what this means.

Or it's an inadequate description.  What's the "unreturnable 10% tax"?  If you paid it, you must have a tax demand or assessment or something that describes it.  Why do you call it "unreturnable"?   [/quote]

Spot on, as usual Allan. In my defence I must say I was completely frazzled last evening when I made the post, in the light of today it does look wrong and it is.

What I wanted to say was: I receive dividends, which are net of 10% UK tax credit, from shares in Investment trusts. This 10% is non-reclaimable in the UK - but I am hoping I might be able to report the dividends on form 2047 K in section IV tableau 2B and benefit from the tax being added back to my income declared in France.

If this is so I will end up with 2 different values on 2 different lines TA - one from section IV 2A (as I have normal dividends to report ) and one from section IV 2B. I wanted to know if I should then add these 2 values together before reporting the total to line TA on 2042K?

Hoping this is a little clearer.

Sue

 

[suein56]

Re this query I sent an email to my local tax office and I've just received the reply, from the chief inspector no less saying my interpretations are correct.

So yippee; another problem solved.

Aren't French tax inspectors wonderful?

Sue [:D]

[allanb]

OK; I think the only thing that remains to be clarified is what you mean by "normal" dividends.  In UK tax law, dividends from "ordinary" companies, unit trusts, and investment trusts (officially called "open-ended investment companies") are all treated in the same way: the dividend comes with a tax credit, the amount of which can be offset against your tax liability if you have one, but cannot be reclaimed if you have no tax liability (unlike the withholding tax on interest).

All such dividends should come with a voucher which shows the amount of the tax credit (currently 11% of the amount you received, which is the same as 10% of the gross amount.)

Under the tax treaty, if you are resident in France, the dividends are taxable only in France, and the credit is available only against your French tax liability.

It sounds to me as though all your dividends fall into the same category, and the treatment will be the same for all of them.

If you can confirm this, I think I can answer the question, having clarified the same thing with the tax office for my own declaration.

[suein56]

[quote user="allanb"]OK; I think the only thing that remains to be clarified is what you mean by "normal" dividends. 
It sounds to me as though all your dividends fall into the same category, and the treatment will be the same for all of them.

If you can confirm this, I think I can answer the question, having clarified the same thing with the tax office for my own declaration.
[/quote]

By normal dividends I meant dividends received from companies such as BT, who issue shares in their own company. These I thought should be dealt with in section IV tableau 2A of form 2047 - éligibles à l'abattement de 40%.

Then I have Investment trust dividends - still with a UK tax credit of 10%. By virtue of the fact that these companies invest in lots of other companies I thought that the dividends I receive from them should be dealt with in IV tableau 2B - non-éligibles à l'abattement de 40%.

Perhaps I am wrong but as it says in the notes for 2047 that 'les sociétés d'investissement dont l'activité consiste de la gestion d'un portefeuille de valeurs mobilières' are excepted from the 40% reduction. I was assuming that that is exactly what the Investment Trust companies did - manage a portfolio of investments in other companies.

Sue

 

[allanb]

Sue: I owe you an apology.  I thought I could give you a definite answer, but I now realize that it may not be clear whether you get the 40% allowance on dividends paid by an investment trust.

I'll tell you the story, although you may of course decide to ignore it, especially if the amount isn't very large.

In France, as you probably know, there is the same distinction as in the UK between a unit trust (where the money you invest is added to the fund and used to buy more shares) and an investment trust (where the number of shares is fixed, and your money is buying existing shares from somebody else).  A unit trust in France is called a société d'investissement à capital variable (SICAV) and an investment trust is called an organisme de placement collectif en valeurs mobilières (OPCVM).

I had read in various places that dividends received from an OPCVM get the same 40% allowance as any other company dividend, just as though you had received the dividend directly from the underlying company.  Here, for instance, is a statement by Banque Paribas in an article on the taxation of investment trusts ("Fiscalité des OPCVM"):

Ces dividendes sont également soumis à l'impôt sur le revenu après un abattement de 40 % (qui remplace l'avoir fiscal) du montant des dividendes. L'abattement de 1525 € pour une personne seule et de 3050 € pour un couple marié s'applique au montant net des revenus après application de l'abattement de 40 %.

In view of this, and since note 6 in the tax form (which you quoted) refers to the exception as les sociétés d'investissement, which ties in with the definition of a SICAV, I said that I thought your investment trust dividends would get the 40% allowance.

However, I can't find confirmation of this in any official publication, so it probably isn't safe to rely on it.  If you report the dividends as you originally intended (before my rash intervention!) you can't be accused of claiming an allowance incorrectly.

On the other hand, if the amount is worth while, you could always ask your tax office.  The question is simple enough:  are dividends from an OPCVM treated in the same way as dividends from any other company?  Maybe there is someone on the forum who really knows the answer to this.

We've moved on a bit from your original question about reporting the tax credit.  In my opinion, for what it's worth, if you report dividends in both sections A and B on 2047, it must be correct to combine the amounts in the two boxes 'TA' and report the total in the single box 'TA' on 2042C.

[suein56]

You certainly don't owe me an apology. I am grateful that you have taken the time to answer my query at all.

And I am even more grateful for your original post re the 40% abattement for ordinary shares as I had not been aware prior to that of such a possibility.

For the moment regarding the Investment Trust dividends, I am going to play safe this year as the amounts involved are not huge; though I fully intend to find out more before next year's tax declaration.

I contacted my tax office regarding the reporting of the dividends in sections A and B, and you are absolutely right in that I must combine the values of the 2 boxes TA and report the total in the final box TA on 2042CK.

Many thanks again for your input, it's reassuring to discover that I have company on what is, for me, a steep learning curve.

Sue