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REDDIT

Is it best to sell shares just before the ex dividend date to reduce income tax?

R
Apr 17, 2025 · 21:43

I am a 45% income tax payer. I would pay £45 on every £100 dividend but only £24 capital gains tax. This is assuming that the share price drops £100 on the ex dividend date.
So for example £10000 of shares go up £1000 and paid a dividend of £1000 but dropped back a £1000 on the dividend date, I would be better selling before the dividend date and paying £240 capital gains tax on the capital gain rather than £450 on the dividend??
Then buying back the shares as soon as they went ex dividend at the reduced price??