The Share Centre - Composite Tax Certificate

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Tax allowances and the benefits of tax-efficient accounts could change.

Composite Tax Certificate

A Composite Tax Certificate (CTC) will be sent to you at the end of each tax year in your April valuation. It summarises the dividends and interest received from your investments that have been paid to your account.

Our CTC is designed to accommodate the numerous types of tax that exists and will help you complete your tax return. There are up to six different sections (as shown below), but that number will depend on the types of investments that we hold for you and the accounts you have.

You should retain your CTC as it may be required by HMRC as evidence of tax deducted or of entitlement to a tax credit. Please note that we do not issue a CTC for Individual Savings Accounts (including Lifetime ISAs), Junior ISAs or Child Trust Funds as these accounts do not attract Capital Gains Tax or Income Tax.

Types of dividend or interest

Dividends received from UK Securities

This will list dividends from mainly UK Shares and Unit Trusts with associated tax credit.

Interest received from Securities

This will list interest received from Government Stock (Gilts) and other fixed interest investments such as Bonds. Normally these investments are paid without the deduction of tax, but if tax is deducted, it will be separately detailed. Certain Unit Trusts and certain high yield funds will also be included within this CTC.

Please note that if you receive any interest on any cash that you hold in your account at The Share Centre, this will be shown on your account statement.

Dividends & interest payments received from Accumulation Funds

Accumulation Funds retain the dividends and interest within the Fund and no cash payment is made to you. These notional payments should be included in your tax return.

Return of Capital (Equalisation) from unit trusts

All investors eligible for a dividend from a unit trust receive the same total distribution per unit, however holders of ‘Group 2’ units (units purchased during the latest accounting period) receive part of this payment as ‘equalisation’. The equalisation payment represents the income accumulated on the Group 2 units up to the point of purchase from the previous accounting period. As this is effectively a return of part of the purchase price, it is not liable to income tax and should be deducted from the cost of your units for capital gains tax purposes.

Dividends received from Foreign Securities

These are normally paid after the deduction of Dividend Withholding Tax. This tax is deducted in the country of origin before the payment is made to us. The rate varies from country to country. Dividends from US shares are subject to withholding tax of up to 30% unless you have completed a W-8BEN form. The form certifies you’re not a US person and is only applicable to residents of countries which have a Tax Treaty with the US, hence reducing your rate of taxation.  

Property Income Distributions (PIDs) on UK Real Estate Investment Trusts (REITs)

PIDs are paid with tax deducted, currently at a rate of 20%.

If you have any questions relating to your CTC, please give us a call on 01296 41 41 41.