£11000 Pa & £5000 dividends-No Earned Income?

philng

Recently taken VR & for now intend to live off my investments until receipt of Pension.
Am I correct in saying if I have no earned income in theory I could receive £16000 in share dividends without paying tax? ie utilising my personal allowance PLUS the £5000 dividend allowance.

unforeseen

Yes you can. The first £5k will be attributed to the dividend allowance and the remainder to your normal tax allowance

Dird

Would NI not be liable though?

xylophone

OP, have you obtained a new state pension statement?

You are 51, no longer working, and have a deferred DB pension.

This indicates that your starting amount is likely to be less than the full new state pension.

If so, you might wish to consider voluntary contributions?

https://forums.moneysavingexpert.com/discussion/comment/71520743#Comment_71520743

Dazed_and_confused

If you changed from all stocks/shares to include some savings then you could also potentially benefit from the savings rate band (£5000 at 0%) and the savings allowance rate band (£1000 at 0%).

£22000 in total with no tax or ni to pay and you coukd probably still use the NHS if need be

bigfreddiel

If your divi earning investments are in an ISA then there is no tax implication - nice one! fj

philng

My national insurance record shows 35 years as it has counted the 2 years at college age 16 to 18.

Yes I have a good proportion in share is as but also share holdings particularly in 1 company outside the isa.

As a couple effectively we have the £17k twice if splitting finances sensibly without paying tax.

MDMD

unforeseen wrote: »

Yes you can. The first £5k will be attributed to the dividend allowance and the remainder to your normal tax allowance

This is not quite correct. The first chunk uses up the PA first, as this is always used up before any other rate bands or allowances. The dividend allowance is actually a nil rate band and therefore it forms part of taxable income, taxed in this case at 0%.

The impact is that the same however.

http://www.rossmartin.co.uk/directors/tax-efficient-remuneration/1591-summer-budget-2015-dividend-tax