tax on share dividends outside ISA

xyz123

hi

can someone give some info on how share dividends are taxed for shared held outside ISA?

is it simply treated like savings i.e. another income which will be taxed based on total earnings or is it like capital gains tax where if the total income from dividends is less than a certain amount, there is no tax to pay.

HMRC website doesnt list information for 2013-14 year.

Dazed_and_confused

xyz123 wrote: »

hi

can someone give some info on how share dividends are taxed for shared held outside ISA?

is it simply treated like savings i.e. another income which will be taxed based on total earnings or is it like capital gains tax where if the total income from dividends is less than a certain amount, there is no tax to pay.

HMRC website doesnt list information for 2013-14 year.

It's a bit of both really, they are treated as income for income tax purposes but come a notional 10% tax credit i.e you get dividend £90 plus notional tax £10 = income for tax of £100.

The tax cannot be repaid in any circumstance and there is nothing extra to pay unless you are a higher rate taxpayer.

jimmo

Here's the 2012/13 version which explains the principles.
http://www.hmrc.gov.uk/taxon/uk.htm

CLAPTON

the rules are quite hard to understand

but in simple terms

if your income is less than 41450 (year 13-14) then you have no tax liability on your dividends because they come with a notional tax already paid.

if you pay 40% tax then you have to pay 25% of the actual dividend received.

xyz123

CLAPTON wrote: »

the rules are quite hard to understand

but in simple terms

if your income is less than 41450 (year 13-14) then you have no tax liability on your dividends because they come with a notional tax already paid.

if you pay 40% tax then you have to pay 25% of the actual dividend received.

Thanks. then i better purchase shares in OH's name as she doesnt pay 40% tax.