MSE News: Summer Budget 2015: Dividend tax overhaul: winners and losers

SnowMan

There is a factsheet on the dividend taxation changes

https://www.gov.uk/government/publications/dividend-allowance-factsheet/dividend-allowance-factsheet

Example 6 is interesting as it shows it isn't as simple as ignoring the first £5,000 of dividends. The first £5,000 of dividends IS included as income in determining whether those dividends which are above £5,000 are taxed at higher rate.

TheTracker

SnowMan wrote: »

There is a factsheet on the dividend taxation changes

https://www.gov.uk/government/publications/dividend-allowance-factsheet/dividend-allowance-factsheet

Example 6 is interesting as it shows it isn't as simple as ignoring the first £5,000 of dividends. The first £5,000 of dividends IS included as income in determining whether those dividends which are above £5,000 are taxed at higher rate.

This is in line with how it worked before / works today. I currently pay 0% on any dividend that brings my income up to the higher rate then 25%. In future, same process, but I pay 0% only on the first 5000, then marginal rates of 7.5% up to the higher rate threshold if any remains, and 32.5% based on income including the dividend.