U3A Investment group web page
Please let Janet know if you find this useful
Shares
The best way to hold shares if you are likely to make a profit on them is to
wrap them in an ISA folder. See the page on ISAs.
You can buy and sell shares through banks, building societies or share
dealers such as Lansdown Hargreaves, IWeb etc. Some have lots of
information about the companies, but have higher charges, and some
don’t charge for selling and buying but you have to make your own decisions. Always check
what it will cost you.
Investments. If you have an investment (or you were advised to invest) and the provider or
adviser has gone out of business, you may be able to claim compensation with FSCS. Whether
you already have an investment or are thinking of investing, you should check that it's FSCS
protected.
Dividend Tax
There are two ways you make money from investing. One is when the shares increase in
value and then you reap a nice profit when you sell them. The other is when they pay
dividends.
Dividends are a bit like interest on a savings account. If a company makes a profit, it gives some of it
back to you – it could be on a regular basis or as a one-off. And just as you have a personal savings
allowance for tax-free interest on savings, you also have a tax-free dividends allowance.
The allowance for tax-free dividends is halved to £1,000 for the 2023/24 tax year, but there's no
change for dividend tax.
Any dividends received above this allowance are taxed at the rates shown below, unless your
shares are held in a stocks & shares ISA (where dividends are always tax-free).
If you earn more than £1,000 a year in dividend income outside of a stocks & shares ISA, you'll need
to inform HM Revenue & Customs.
Dividend tax in 2022/23
TAX BRACKET
RATE
Basic rate
8.75%
Higher rate
33.75%
Additional rate
39.35%
