New dividend allowance if income is between £100K and £120K

New dividend allowance if income is between ...

Didn't find your answer?

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.

Replies (7)

Please login or register to join the discussion.

By cheekychappy
11th Mar 2016 13:45

Have you considered Microsoft Excel? I find it to be a fantastic tool.

Thanks (0)
Portia profile image
By Portia Nina Levin
11th Mar 2016 13:58

I have just had a look in my big book of rocket science for you, but the answer is not in there.

Thanks (1)
avatar
By stephenkendrew
11th Mar 2016 14:32

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.

 

Thanks (1)
avatar
By TaxAngel
11th Mar 2016 14:37

....but the first £5K of dividend is tax-free?

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.

Thanks (0)
Replying to lionofludesch:
RLI
By lionofludesch
14th Mar 2016 14:05

Only Fools ......

TaxAngel wrote:

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.

Thanks (0)
By cheekychappy
11th Mar 2016 14:38

The first £5000 is taxed at 0

The first £5000 is taxed at 0%

Thanks (0)
avatar
By CrowtherP
14th Mar 2016 14:00

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.

Thanks (0)