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Divvie tax calculation update

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    Divvie tax calculation update

    See here:

    Dividend tax update: New advice on nil-rate allowance | AccountingWEB

    #2
    So it was pretty much what we exected
    Originally posted by Stevie Wonder Boy
    I can't see any way to do it can you please advise?

    I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

    Comment


      #3
      OK, so that's worse than predicted. If it's not an allowance, it counts towards the basic rate band, and the total amount that can be taken is reduced accordingly before the higher rate band is reached.

      Comment


        #4
        Originally posted by SimonMac View Post
        So it was pretty much what we exected
        Nope, the summer budget described the 5k as "tax free", so it was assumed to be an allowance, i.e. removed from the total dividend before the ordinary banding is applied. If it's zero-rated, it will count towards the basic rate band. Bottom line, you'll hit the higher rate band sooner than anticipated.

        Comment


          #5
          Originally posted by jamesbrown View Post
          Nope, the summer budget described the 5k as "tax free", so it was assumed to be an allowance, i.e. removed from the total dividend before the ordinary banding is applied. If it's zero-rated, it will count towards the basic rate band. Bottom line, you'll hit the higher rate band sooner than anticipated.
          that's not what I assumed... perhaps that's the difference between pessimists and optimists

          Comment


            #6
            Originally posted by pr1 View Post
            that's not what I assumed... perhaps that's the difference between pessimists and optimists
            Then you were correct The majority of calculations/calculators I've seen were premised on the 5k being an allowance.

            However, it's worth bearing in mind that this is just another set of "guidance". Until we see the actual legislation...

            Comment


              #7
              Originally posted by jamesbrown View Post
              OK, so that's worse than predicted. If it's not an allowance, it counts towards the basic rate band, and the total amount that can be taken is reduced accordingly before the higher rate band is reached.
              That's how I read it; wanted someone else to confirm! Some of the comments still seem to think it's tax free though?

              Comment


                #8
                Originally posted by mudskipper View Post
                That's how I read it; wanted someone else to confirm! Some of the comments still seem to think it's tax free though?
                It could still be argued to be "tax free", but in a conditional sense. It depends what you mean by tax free. You won't pay tax on the first 5k of dividends, regardless of your marginal rate. However, it will impact the rates at which you pay tax on other income (in particular, other dividend income, because that is the last slice); had this been an allowance, that would not be true.

                Comment


                  #9
                  Originally posted by jamesbrown View Post
                  It could still be argued to be "tax free", but in a conditional sense. It depends what you mean by tax free. You won't pay tax on the first 5k of dividends, regardless of your marginal rate. However, it will impact the rates at which you pay tax on other income (in particular, other dividend income, because that is the last slice); had this been an allowance, that would not be true.
                  So 11k salary, 5k tax free dividends plus 27k dividends @ 7.5% dividend tax to stay under the upper limit?
                  In Scooter we trust

                  Comment


                    #10
                    Originally posted by The Spartan View Post
                    So 11k salary, 5k tax free dividends plus 27k dividends @ 7.5% dividend tax to stay under the upper limit?
                    I'm tempted to say yes, but it obviously depends on the actual legislation. Also, based on the same article, the allowance for tax-free interest (first 1k) seems to be in doubt.

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