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Find out more'I invest in an Isa, so why are my dividends still being taxed?'
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In March 2024, I arranged to have my shares moved into an Isa, which I understood will make any future dividends tax-free.
The next dividend payment was about a month later, but it turns out this was taxed.
Is this a mistake?
David from Kent
'HMRC cares more about when the dividend is confirmed'
Joanne Padilla, Which? Money expert, says...
There’s no mistake: you were caught out by the dates.
When moving investments into an Isa, you should check the company’s record date and ex-dividend date.
The record date is the cut-off date set by a company to determine which shareholders are eligible to receive the declared dividend. The ex-dividend date (since May 2024, it’s always the same day) is when the stock starts trading without the value of its next dividend payment.
They’re both separate to the payment date, which is when you actually get the money.
HMRC looks at the record date, not the payment date
Crucially, to determine if a dividend is in or out of an Isa, HMRC looks at the record date, not the payment date.
Although you didn’t get the money until April, you confirmed that the record date was 1 March for the shares you held. As they weren’t moved into an Isa until 24 March, the dividend was confirmed while still taxable.
Other readers planning to move investments into an Isa should contact their investment platform first, as some offer discounted fees for selling and rebuying as part of the ‘Bed and Isa’ process.
- Find out more: Best stocks and shares Isas 2025
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