How do I record Dividend Income?

Clients may have investments that produce dividend income which you wish to record within CCD. This can be done in two ways, depending on the level of detail you wish to record and present to the clients in reports.

Option 1. - Recording summary-level distributed dividend income.

With this option, it is possible to record the dividend income produced by an investment and report on that income by tax year. To do this, simply record a client's asset, such as an equity, as an unwrapped (directly held) asset.

Once this has been completed, you can record the dividend income produced by creating a withdrawal entry. The details should be added to the system and the dividend recorded as a value rather than percentage of the fund. To record the withdrawal, navigate to the appropriate client holding then click on Details > Withdrawals. Click the + Add record button to record the withdrawal.
Additional subsequent dividends can be added at any time and a report can then be produced which will show the income produced, by tax year. It should be noted that this will not affect the overall value of the investment.

Option 2. - Recording detailed dividend income whether distributed or not.

For clients for whom you wish to record more detailed information, this can be achieved in the manner below.

It should be noted that this method will allow you to deal with both distributed dividend income and also with income that is allocated to the investment as additional units, such as accumulation funds.

In this case, the asset should be added as a wrapped asset, which will allow details of the investments to be created at a transactional level.

Once this has been done, the original (and subsequent) purchase of units can be recorded.

Dividend income can be recorded as an additional allocation of units. This should be recorded as a purchase, but naturally, no additional premium record should be created in the system. The detail can be recorded as a corporate stock event or, if desired, an additional category of 'Dividend' can be added.
This same method can be used to deal with other distributions, such as Rights Issues.

If the dividend is added to the investment, for example in an accumulation fund, the details should be recorded for that allocation. Please note that the unit price at which the units/shares are allocated may be different from the current price.

If the income is distributed, then the dividend can be recorded as a purchase, and the distribution can be recorded as a sale. In this case, where units/shares are not physically purchased, you may wish to use a unit price of 100p for both the unit purchase (offer) price and unit cancellation (bid) to differentiate this from other transactions.

Please note that in this scenario, the overall number of units/shares held will not be altered.

A transaction history report for this investment can be produced.