Post by CJBAs a UK born and resident national and ex-employee of the now Spanish-owned so-called British Airways I have some shares given to me many years ago. It would be wdely known that IAG / BA refused to pay dividends on such for many years. But now they are paying a paltry return - redued by exorbitant Spanish tax together with a poor Euro to GBP exchange rate. My question now is do I have to declare these dividends for UK tax purposes. Secondly how do I sell the damned shares - which are just about worthless anyway? Thanks - Chris B.
IAG appear to be quoted on the London Stock Exchange, so you sell them
through any broker in the normal way. Your bank probably has a service,
although it might not be the cheapest. As windfall shares, the whole
value, less your selling costs will be capital gains, so you should
check if they take you over the CGT threshold.
Declaring them for tax would be important if you have other dividend
income that takes you above the dividend allowance, or if you have CGT
to pay, and the income would push you into a higher tax rate band.
Otherwise, it might really just be to try and get the benefit of any
Spanish tax paid. Unfortunately, I'm not sure how the new rules work on
this, as I basically let HMRC do the work for me, and the only foreign
income I have is from collective investments.
If you do need to fill in a tax return, there is a special section of
the main tax form for taxed foreign dividends totalling no more than
£300, which was, almost certainly introduced precisely because of IAG
and Santander shares.
If in doubt, write to HMRC (or use the additional information box, in
plenty of time).