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[FAQ] Dividends Tax when shares are transferred
- 20 January 2023
- Individuals Tax
- The Tax Faculty Tax Specialist
This article is based on tax law for the year ending 28 February 2022.
Background
I am working at a company declaring dividends soon. The ownership was with individuals, who then created and transferred shares halfway through the year, to companies owned by the same individuals. Is dividend withholding tax payable on the apportioned section in the first half of the year where ownership was with the individual, or is it completely exempt due to ownership as at the date of dividend declaration.
Answer
Dividend are declared on a specific date and becomes payable to the holder of the share at that specific date. Therefore, there would not be a need to apportion anything as the individuals are not entitled to any dividend at the date the dividend was declared and is exempt when due to a company.