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Get Started in Shares by Glen Arnold

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Tax is deducted before you get the dividend

The dividend yields for UK firms shown in the Financial Times are calculated after deducting 10% tax from the gross dividend. The company sends you a cheque (the net dividend) but also pays the tax authorities 10% of the total gross dividend directly. You do not have to do anything about this except keep a record that tax was paid on your behalf. There is more on taxation for investors in Chapter 17. The dividends, on overseas companies are shown gross, i.e. without the tax deducted.

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