Rule
If a deemed interim dividend is deemed to be paid before the date of death then the dividend must be declared on the deceased’s personal tax return for the period 1 January to the date of death.
If a deemed interim dividend is deemed to be paid after the date of death then the dividend must be declared on an estate tax return and will be taxed on the executors and administrators and will be a debt due and payable out of the deceased’s estate. However, the quantum of the assessment shall not include any deemed interim dividend attributable to a non resident beneficiary.
Deemed final dividends attributable to the deceased must be declared on an estate tax return and will be taxed on the executors and administrators and will be a debt due and payable out of the deceased’s estate. Deemed final dividends attributable to the Jersey resident beneficiaries of the estate will only arise when there is a tax trigger event applicable to each of them.
When the ownership of the ordinary share capital has been transferred to the individual beneficiaries so that they are now the registered shareholders, the Jersey resident individual beneficiaries will then be personally taxed on any subsequent deemed interim dividends and deemed final dividends.
Assessment of deemed dividends: Example 1
ABC Trading Limited
| Financial year ended 31 December 2009 |
|---|
| Relevant profit for the financial year | £12,000 |
| Preference dividend | £0 |
| Dividend paid | £0 |
Synopsis:
- Mr A owned 12 shares being 100% of the issued ordinary share capital
- Mr A died on 31 March 2009
- Two Jersey beneficiaries share in the estate equally: Mr B and Mr C
- The shares are transferred to Mr B and Mr C so that they are now the registered shareholders on 1 January 2010
Amount deemed interim dividend attributable to an ordinary share
This is calculated as (60% of relevant profits) less relevant dividends paid or issued) divided by number of ordinary share issued
(60% of relevant profits) less relevant dividends paid or issued) divided by number of ordinary share issued |
|---|
| (60% x £12,000) less £0) / 12 shares | £600 |
Amount of the interim dividend deemed to have been paid to Mr A deceased
This is calculated as (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period
(Number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period |
|---|
| (90 days x 12 shares x £600) / 365 days | £1,775 |
Executor declares deemed interim dividend of £1,775 on an estate tax return.
Amount of the interim dividend deemed to have been paid to Mr B and Mr C
This is calculated as (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period
(Number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period |
|---|
| (275 days x 12 shares x £600 / 365 days | £5,425 |
Executor declares deemed interim dividend of £5,425 on an estate tax return.
Amount of deemed final dividend deemed to have been paid to Mr A (deceased)
The amount deemed final dividend attributable to an ordinary share is calculated as the relevant profits less relevant dividends paid or issued divided by number of ordinary share issued.
(Relevant profits less relevant dividends paid or issued)
divided by number of ordinary share issued |
|---|
| (£12,000 less £0) / 12 shares | £1,000 |
| Deemed final dividend per share |
|---|
| Deemed final dividend per share | £1,000 |
| Less: Interim dividend per share | £600 |
| Balance of deemed final dividend per share | £400 |
Amount of the final dividend deemed to have been paid or issued
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period
(Number of days in which shares held x number of shares held x amount per share)
divided by number of days in financial period |
|---|
| (90 days x 12 shares x £400) / 365 days | £1,184 |
Executor declares deemed final dividend of £1,184 on an estate tax return.
The deemed final dividend applicable to Mr B and Mr C will only arise when there is a tax trigger event applicable to each of them. This will be:
| Mr B |
|---|
| (275 days / 365 days) x 6 shares x £400 | £1,808 |
Mr B declares a deemed final dividend of £1,808 on his personal tax return.
| Mr C |
|---|
| (275 days / 365 days) x 6 shares x £400 | £1,808 |
Mr C declares a deemed final dividend of £1,808 on his personal tax return.
Assessment of deemed dividends: Example 2
XYZ Trading Limited
| Financial year ended 31 March |
|---|
| Relevant profit for financial year 2009 | £12,000 |
| Relevant profit for financial year 2010 | £15,000 |
| Relevant profit for financial year 2011 | £20,000 |
| Preference dividend | £0 |
| Dividend paid | £0 |
Synopsis:
- Mr A owned 12 shares, being 100% of the issued ordinary share capital
- Mr A died on 30 June 2010
- Two Beneficiaries share in the estate equally
- Mr B (Jersey resident) and Mr C (Non resident)
- The shares are transferred to Mr B and Mr C on 1 April 2011 so that they are the registered shareholders from that date
Amount deemed interim dividend attributable to an ordinary share
This is calculated as (60% of relevant profits) less relevant dividends paid or issued) divided by number of ordinary share issued.
(60% of relevant profits) less relevant dividends paid or issued)
divided by number of ordinary share issued |
|---|
| (60% x £12,000) less £0) / 12 shares | £600 |
Amount of the interim dividend deemed to have been paid to Mr A deceased
This is calculated as (Number of days in which shares held x number of shares held x amount per share) x number of days in financial period.
(Number of days in which shares held x number of shares held x amount per share)
x number of days in financial period |
|---|
| (365 days x 12 shares x £600) / 365 days | £7,200 |
Executor declares deemed interim dividend of £7,200 on Mr A deceased 2010 tax return to date of death as the deemed interim dividend is deemed to be paid on 31 March 2010.
Amount of deemed final dividend deemed to have been paid to Mr A deceased
The amount deemed to be the final dividend attributable to an ordinary share is calculated as (relevant profits less relevant dividends paid or issued) divided by number of ordinary share issued.
(Number of days in which shares held x number of shares held x amount per share)
x number of days in financial period |
|---|
| (£12,000 less £0) / 12 shares | £1,000 |
| Final dividend per share |
|---|
| Deemed final dividend per share | £1,000 |
| Less: Interim dividend per share | £600 |
| Balance of deemed final dividend per share | £400 |
Amount of the final dividend deemed to have been paid or issued
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period
(Number of days in which shares held x number of shares held x amount per share)
x number of days in financial period |
|---|
| (365 days x 12 shares x £400) / 365 days | £4,800 |
Executor declares deemed final dividend of £4,800 on an estate tax return
Amount deemed interim dividend attributable to an ordinary share
This is calculated as (60% of relevant profits) less relevant dividends paid or issued) divided by number of ordinary share issued.
(60% of relevant profits) less relevant dividends paid or issued)
divided by number of ordinary share issued |
|---|
| (60% x £15,000) less £0 / 12 shares | £750 |
Amount of the interim dividend deemed to have been paid to Mr A deceased
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period
(Number of days in which shares held x number of shares held x amount per share)
divided by number of days in financial period |
|---|
| (365 days x 12 shares x £750) / 365 days | £9,000 |
Executor declares deemed interim dividend of £9,000 on an estate tax return.
Amount of deemed final dividend deemed to have been paid to Mr A deceased
(Relevant profits less relevant dividends paid or issued)
divided by number of ordinary shares issued |
|---|
| (£15,000 less £0) / 12 shares | £1,250 |
| Deemed final dividend per share |
|---|
| Deemed final dividend per share | £1,250 |
| Less: Interim dividend per share | £750 |
| Balance of deemed final dividend per share | £500 |
Amount of the final dividend deemed to have been paid or issued
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period
(Number of days in which shares held x number of shares held x amount per share)
divided by number of days in financial period |
|---|
| (365 days x 12 shares x £500) / 365 days | £6,000 |
Executor declares deemed final dividend of £6,000 on an estate tax return.
Amount deemed interim dividend attributable to an ordinary share
This is calculated as (60% of relevant profits) less relevant dividends paid or issued) divided by number of ordinary share issued.
(60% of relevant profits) less relevant dividends paid or issued)
divided by number of ordinary share issued |
|---|
| (60% x £20,000) less £0) / 12 shares | £1,000 |
Amount of the interim dividend deemed to have been paid to Mr A deceased
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period.
(Number of days in which shares held x number of shares held x amount per share)
divided by number of days in financial period | |
|---|
| (91 days x 12 shares x £1,000) / 365 days | £2,992 |
Executor declares deemed interim dividend of £2,992 on an estate tax return.
Amount of the interim dividend deemed to have been paid to Mr B
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period.
(Number of days in which shares held x number of shares held x amount per share)
divided by number of days in financial period |
|---|
| (274 days x 6 shares x £1,000) / 365 days | £4,504 |
Executor declares deemed interim dividend of £4,504 on an estate tax return.
There is no deemed interim dividend deemed to have been paid to Mr C as he is non-resident
Amount of deemed final dividend deemed to have been paid to Mr A deceased
The amount deemed final dividend attributable to an ordinary share is calculated as the (relevant profits less relevant dividends paid or issued) divided by number of ordinary share issued.
(Relevant profits less relevant dividends paid or issued)
divided by number of ordinary share issued |
|---|
| (£20,000 less £0) / 12 shares | £1,667 |
| Deemed final dividend per share |
|---|
| Deemed final dividend per share | £1,667 |
| Less: Interim dividend per share | £1,000 |
| Balance of deemed final dividend per share | £667 |
Amount of the final dividend deemed to have been paid or issued
This is calculated as the (number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period.
(Number of days in which shares held x number of shares held x amount per share)
divided by number of days in financial period |
|---|
| (91 days x 12 shares x £667) / 365 days | £1,995 |
Executor declares deemed final dividend of £1,995 on an estate tax return.
The deemed final dividend applicable to Mr B will only arise when there is a tax trigger event applicable to him. This will be:
| Mr B | |
|---|
| (274 days x 6 shares x £667) / 365 days | £3,004 |
Mr B declares a deemed final dividend of £3,004
There is no deemed final dividend applicable to Mr C as he is non-resident.
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