40% threshold value

[gadgetman]

I'm trying to determine the figure for dividends above which the additional personal tax is due. Is this figure calculated as:

start of 40% tax band + personal tax allowance - gross salary

[minstrel]

I'm trying to determine the figure for dividends above which the additional personal tax is due. Is this figure calculated as:

start of 40% tax band + personal tax allowance - gross salary

Yes, but remember that dividends include a 10% tax credit for income purposes.

So, for 08/09, if your gross salary is £10k, then you can receive:

(£34,600 + £5,435) - £10,000 = £30,035 of gross dividends.

However, this means you can only distribute £30,035 * 0.9 = £27,031.50 net dividends.

[Chugnut]

Yes, but remember that dividends include a 10% tax credit for income purposes.

So, for 07/08, if your gross salary is £10k, then you can receive:

(£34,600 + £5,435) - £10,000 = £30,035 of gross dividends.

However, this means you can only distribute £30,035 * 0.9 = £27,031.50 net dividends.

And that's if there's no other income or interest from savings to be factored in.

[gadgetman]

Perfect thanks. Do you have the figures for 08/09?

Before anyone asks, I have emailed my accountants but no reply yet

[Alan @ BroomeAffinity]

Unless I'm mistaken, the figures in the example are 08/09.

Change your accountant if he doesn;t answer a simple email like that.

[Hex]

Perfect thanks. Do you have the figures for 08/09?

Before anyone asks, I have emailed my accountants but no reply yet

They'll be announced in the budget tomorrow

[minstrel]

Perfect thanks. Do you have the figures for 08/09?

Before anyone asks, I have emailed my accountants but no reply yet

Sorry - I quoted 08/09 but said 07/08. Useful link to get the latest figures:

http://www.hmrc.gov.uk/rates/it.htm