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Can I delay reciept of dividends

  • 17-04-2021 10:15pm
    #1
    Registered Users Posts: 53 ✭✭


    Just checking if this is the same in Ireland as it is in Canada?

    can one defer tax by taking dividends at a later stage when I'm in a lower tax bracket eg after retiring? Thanks for any insight you have
    this is a hypothetical question so no specific details just on a broad basis, is that correct?


Comments

  • Registered Users, Registered Users 2 Posts: 1,729 ✭✭✭dennyk


    Depends on what you mean by "taking dividends". If whatever asset you hold pays out a dividend, you will generally owe Irish tax on that dividend payment in the tax year in which it was paid, whether or not you actually withdraw said dividend payment from the financial account under which that asset is held (and whether or not you reinvest said dividend into the same asset or fund). If you can somehow request that no dividend should be paid out to you at all from the asset in question, then that might absolve you of any tax liability, but I've never heard of that being an option, unless you're investing in some really esoteric types of assets. Most such funds or stocks are legally obligated to pay out dividends at specified times to all shareholders of the asset in question, and asking them to defer your dividend payout is generally not an option.

    If you mean dividends in a pension, that is a different story. Dividends paid from assets held by a fund in a pension account, like other capital gains from such a pension's assets, are generally not subject to tax at the time they are distributed. The eventual annuity and other distributions that you will receive from a pension are generally taxed as income at the time you receive those distributions, however (with some exemptions and reliefs, such as the tax-free lump sum distribution at your retirement date).


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