32% tax on dividends.. Is this rigjht!!

[Flat Eric]

http://www.direct.gov.uk/en/MoneyTax...nts/DG_4016453

[Bear]

http://www.direct.gov.uk/en/MoneyTax...nts/DG_4016453

No

it's 32.5%

HTH

[VectraMan]

Don't forget the 10% tax credit.

And they say the system is needlessly complicated.

[Bear]

oh and

right

[SueEllen]

oh and

right

Looks like a typing error not a spelling error as H and J are next to each other on the keyboard.

[Flat Eric]

tought crowd

[vhadiant]

http://www.direct.gov.uk/en/MoneyTax...nts/DG_4016453

I thought it has always been like that?

[Bear]

tought crowd

Yeah - sorry. mucking about

it is 32.5% on any dividends received above threshold. Although you get a 10% tax credit so you pay a rate of 22.5% on dividends you take from YourCo.

[Bluebird]

also from the same article

If you pay tax at or below the basic rate

You have no tax to pay on your dividend income because the tax liability is 10 per cent - the same amount as the tax credit - as shown in the tables.

If you pay tax at the higher rate

You pay a total of 32.5% tax on dividend income that falls above the basic rate Income Tax limit (£34,600 for the 2007-2008 tax year). But because the first 10 per cent of the tax due on your dividend income is already covered by the tax credit, in practice you owe only 22.5 per cent.
Note that dividend income, like savings income, is taxed after your non-savings income (for example, wages and self-employment profit) at your highest tax rate. If it falls both sides of the £34,600 higher rate tax bracket, it will be taxed partly at 10 per cent (and covered by the tax credit) and partly at 32.5 per cent (less the 10 per cent tax credit).

[TheFaQQer]

tought crowd

tough

HTH