PostedWed, 20 Dec 2023 16:13:54 GMTbyHMRC Admin 25
HiBrent Sandiford,
If the company pays out cash dividends, you will owe taxes on those payments even if you decide to reinvest the cash received.
If however, the company reinvests your dividends to purchase additional shares, you will not owe taxes until you sell those shares.
At that point, you will pay Capital Gains Taxes on the difference between the price you paid for the shares and the price you sold them for. Any income tax already paid is not an allowable expense when working out Capital Gains Tax.
Thank you.
