dividend tax

happyharry23

Hi,

I have shares in both lloyds and Barclys, both of which are/will; pay dividends on the shares that I have. I've looked at if/how I pay tax on my dividends.

hmrc DOT gov DOT uk/taxon/uk.htm
gov DOT uk/tax-on-dividends

"If you don’t pay Income Tax or pay it at the basic 20% rate, you don’t have to do anything about tax on your dividends."

I pay a 20% tax on PAYE. And I have instructed my broker to buy more shares with the dividends that I receive.

Does anyone here earn dividends from the shares? and could you possibly give me some advice on what you do some the end of tax year?

Thanks.

badger09

happyharry23 wrote: »

Hi,

I have shares in both lloyds and Barclys, both of which are/will; pay dividends on the shares that I have. I've looked at if/how I pay tax on my dividends.

hmrc DOT gov DOT uk/taxon/uk.htm
gov DOT uk/tax-on-dividends

"If you don’t pay Income Tax or pay it at the basic 20% rate, you don’t have to do anything about tax on your dividends."

I pay a 20% tax on PAYE. And I have instructed my broker to buy more shares with the dividends that I receive.

Does anyone here earn dividends from the shares? and could you possibly give me some advice on what you do some the end of tax year?

Thanks.

The bit in bold

happyharry23

On the hrmc website it says

"Dividend income at or below the £31,865 basic rate tax limit = 10%"

So I'm a bit confused.

CLAPTON

happyharry23 wrote: »

On the hrmc website it says

"Dividend income at or below the £31,865 basic rate tax limit = 10%"

So I'm a bit confused.

for tax year 2014-15
you have a tax allowance of 10,000
and then tax at 20% on the NEXT 31,865

so unless your income will exceed 41,865 then you are a basic rate tax payer (divis and saving interest grossed up and assuming your PAYE income exceeds 10,000)

TCA

happyharry23 wrote: »

On the hrmc website it says

"Dividend income at or below the £31,865 basic rate tax limit = 10%"

So I'm a bit confused.

10% dividend tax is already deducted by the time you get your dividend. So it's been paid at source and as a basic rate tax payer, you have no more to pay.

badger09

happyharry23 wrote: »

On the hrmc website it says

"Dividend income at or below the £31,865 basic rate tax limit = 10%"

So I'm a bit confused.

Providing your total income is within the basic tax rate band, you don't need to do anything.

Personal allowance £10000 + £31865 = £41865, which is where higher rate tax @ 40% kicks in

happyharry23

Thank you