Dividends beyond £5k taxed wef 2016!!

[DaveB]

I read it as first £5K of dividend income per year is 0%. After that its 7.5% etc.

Thats the £5k tax free bit....

[SimonMac]

is that

£5000 - £43000 = 7.5%,

or

£10600(11000?) - £43000 = 7.5% ?

Any dividends between £5000 - £43000 = 7.5% dividend tax
Any income (I assume not including dividends, otherwise you will be taxed twice) £10600 - £43000 = 20% income tax

The two are unrelated, they just use the same bands for which rate you take

[tractor]

.....

And the Chancellor said that currently, CT is archaic and complex.

Isn't it lucky he simplified it?

[surfcalavera]

I'm confused

We all get 5K tax free right?

So the < £43K, for example, is that of dividends, or of income?

Presumably it makes sense now to pay partner dividends rather than take bigger dividend yourself?

I'm probably wrong, but I read it as total income (dividends, salary etc) combined, which determines which "band" you are in.

then dividend part of your income is taxed as per announced rules (5K tax free, then further up) and salary part of income is taxed as per "non-dividend tax scale" (11000 taxfree and then up)

[d000hg]

And the Chancellor said that currently, CT is archaic and complex.

Isn't it lucky he simplified it?

Businesses where 100% of the workers take the majority of their income as dividends are very much not the norm.
It's just another reminder that the Ltd company setup for contractors is unwieldy... like trying to write a modern web-application in HTML/CSS/JS, they just weren't intended to be used that way

[SpontaneousOrder]

Any dividends between £5000 - £43000 = 7.5% dividend tax
Any income (I assume not including dividends, otherwise you will be taxed twice) £10600 - £43000 = 20% income tax

The two are unrelated, they just use the same bands for which rate you take

"The UK is open for business" ... *significantly increases cost of investing*

[AtW]

Businesses where 100% of the workers take the majority of their income as dividends are very much not the norm.

But he fecked up everybody, including those who get dividends from FTSE shares - that won't be good for stock market as effective after tax yields will drop next year.

[tractor]

....

But he fecked up everybody, including those who get dividends from FTSE shares - that won't be good for stock market as effective after tax yields will drop next year.

Only PSCs, Shirley?

[Guest]

Does the tax apply to dividends paid out or whatever money is lying in the company?

[Pondlife]

Does the tax apply to dividends paid out or whatever money is lying in the company?

Paid out.