Taxability of dividend income from transfer of share without consideration

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This discussion clarifies the tax implications when shares are transferred to a spouse without any payment. If dividends are subsequently received from these shares, the dividend income is generally taxable in the hands of the recipient spouse. However, UK tax law may apply 'clubbing provisions', potentially making the income taxable in the hands of the original shareholder, especially in cases of transfers without consideration.

SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)

27 June 2022 I am a share holder in private company. During the year i have transfer some shares to my wife with out any consideration. During the year my wife have received dividend income from that company as based on shares transfer by me. In this situation the dividend is taxable in the hands of my wife or me. Any clubbing provision appeared in this senario?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 June 2022 Yes, clubbing provisions applicable in this case.

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SHYAM KRISHNAN K

SHYAM KRISHNAN K (Querist)

27 June 2022 In case of LlP i have transfer my investment to wife name. Is these case, when receiving of interest on capital clubbing provision applicable?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

27 June 2022 Yes clubbing provisions applicable on this also.

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