If you or a loved one have received dividend payments from a UK company and were unaware of the need to declare them for tax purposes, it’s important to take action now to avoid penalties down the road. In Ireland, dividend income is treated like any other income and is subject to income tax, universal social charge, and PRSI. The Irish Revenue Commissioners operate a dividend withholding tax regime on any payments made by Irish registered companies, meaning that tax is deducted from dividends at a rate of 25%. However, the UK operates differently and there is no withholding tax on dividends, making it easy for individuals to overlook their tax obligations.
If you or your loved one has received dividend payments and have not declared them for tax purposes, you will need to file tax returns for the years in question and pay any outstanding taxes, surcharges, and interest. You may be eligible to use a shortened and less complex version of the tax return if your income outside PAYE is no higher than €3,175.
It’s important to take action now, as Revenue may come back seeking taxes owed plus interest and potentially penalties for failure to pay. Avoid this risk and seek professional advice from Revenue or a tax specialist to ensure that you are up to date with your tax obligations. Don’t wait until probate stage to deal with this issue, as this can have even greater financial consequences.
If you have any queries or concerns about dividend income and tax obligations, send your questions to Dominic Coyle at The Irish Times.
