Reply To: DIVIDENDS- Treated as Capital or Income?


Other threads mostly point to taking the Dividends as capital and not income- But noted tax credits/ UC as income..


This is an extract from a previous thread:


'The guidance I was given by the DWP was as follows:
Where a director is actively engaged in the day to day running of the business, the value of any holding in the company and any shares value can be disregarded under Reg 49(5) and (6)
Dividends are income from capital and treated as capital from the date the payment is due or paid, as under Reg 46(4).

The DWP also forwarded me extracts from the DWP Decision Maker's Guide to assist 😕 . In this is states that share dividend is income from capital and should be disregarded'


2nd quote

'I think both pieces of advice are trying to say the same thing – treating dividend payments as income from capital and disregarding them as income is correct. They count as capital, of course, but only to the extent that the claimant actually has any of the money saved up at any given time. If the dividend is here today and gone tomorrow, the current stash of capital will never be any more than £500 and falling fast.

You do have the notional earnings option available: if you feel the company, which is a separate legal entity, can afford to pay the claimant more income for the work that he does and the going rate for that kind of job is higher, you can treat him as earning a more appropriate amount'


Most I found said to treat as Capital but has this changed? Does anyone know?

And if Dividend is used to repay a Directors Loan- How should that be treated.( £10,000- Dividend)