dividend - I think I've got!?


G

Geoff Cox

Hello,

I belive this is the case.

For a dividend taken in the 2008-2009 year of say £9,000 the tax
credit would be £1,000 and so the dividend income would be £10,000.

Now! If my personal income without the dividend is £25,000, with the
dividend income it is £35,000 and with the basic rate allowance of
£6,035 my taxable income would be £35,000 - £6,035 = £28,965 and since
this is below the £34,800, higher tax barrier, I would be paying tax
at the basic rate and so the dividend would be tax free.

Is that right?!

Cheers,

Geoff
 
Ad

Advertisements

M

Martin

Geoff Cox said:
Hello,

I belive this is the case.

For a dividend taken in the 2008-2009 year of say £9,000 the tax
credit would be £1,000 and so the dividend income would be £10,000.

Now! If my personal income without the dividend is £25,000, with the
dividend income it is £35,000 and with the basic rate allowance of
£6,035 my taxable income would be £35,000 - £6,035 = £28,965 and since
this is below the £34,800, higher tax barrier, I would be paying tax
at the basic rate and so the dividend would be tax free.

Is that right?!

Cheers,

Geoff
Yes, in effect.

You'd be paying 20% on £18,965 and 10% on £10,000 - then deduct the £1,000
div tax credit.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top