Can anyone point me to an example of a tax calculation showing the interaction of new dividend nil band and the taper for personal allowances please? Eg for the following or similar scenarios: Salary £102K, dividend £6K or Salary £117K dividend £6K.
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I have just had a look in my big book of rocket science for you, but the answer is not in there.
full dividend included
The dividend allowance does not make any difference to the taxable income.
So, income of £102K salary and £6K dividends reduces the personal allowance by £4,000.
Only Fools ......
Thank you - I think I was focussing too much on the 60% marginal rate and should (as cheeky chappy appears to be suggesting) just have worked through it methodically. It has been a long week.
Being tax free doesn't mean there won't be tax on it.
Withdrawing allowances has to be the world's worst idea. It's riddling with anomalies.
123000 in your second case
So to be clear, the salary and BIKs / dividends of 117,000 and 6,000 respectively gives the UK resident taxable income of £123,000. This is for 2016-17 tax year.
No personal allowance will be received unless gift aid or other deductions, loan interest etc. or loss relief exceed £1,000.
Thus the 2017 dividend tax is £325 but the P.A. foregone via the dividend is £2,500 and so this costs £1,000.