A Dividend is the distribution of profits to its shareholders. In the terms of a Credit Union, the members are the share holders.
A Credit Union must make minimum contributions to their reserves and are then able to use additional funds to distribute these funds to members in the form of a dividend.
Dividends are paid based upon the amount of shares held by a shareholder.
For Credit Unions they are based upon an average share holding in the qualifying year and is usually paid in the following year.
A Dividend paid in 2019 will be the calculation of the average shares from October 2017 to September 2018, it is not based upon the shareholding at yearend. A daily average balance is calculated and the percentage of dividend paid on those shares. This must be approved by the membership at the Annual General Meeting.
If you're a member of Halton Credit Union, are over 18 years of age and you have at least £1 in your savings (Share account), then, yes, you are.
Unlike many companies who issue shares, the number of shares held do not dictaate how much of a say you have over the actions of the company. For Credit Unions it is one account(member) one vote. This means that all members are equal within a Credit Union, all members are able to attend the Annual General Meeting (AGM), ask questions, stand for election to the Board (There are terms and conditions for being able to sit on the board), and vote on all matters at the AGM.
All income is taxable, although, there may be some tax free allowance.
Your dividend is paid gross of tax, so you should ensure you meet any taxation responsibilities that may be due. Halton Credit Unions financial year runs from October to September and we are required to report dividend payments in excess of £250 to HM Revenue and Customs.
This information is correct as of November 2020, but may be subject to change, please check with Halton Credit Union, HM revenue and Customs or speak to your accountant, if you have one.