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colsten

Eco_Miser wrote: »

Previously, dividend income was assessed after savings income, and there was no way dividend income could change the tax on savings income. Now it can.

It's because dividend income will also count towards your taxable income. For the purposes of savings tax, there is no reason to treat it any different to other items that count towards your taxable income.

polymaff

colsten wrote: »

I just repeat again:

At last - something we agree about.

polymaff

colsten wrote: »

It's because dividend income will also count towards your taxable income. For the purposes of savings tax, there is no reason to treat it any different to other items that count towards your taxable income.

Go on, Eco Miser, I'm only too happy for you to take over. Colsten has a track record for this sort of intransigence..

polymaff

Eco_Miser wrote: »

Well, you could explain the actual function of dividend income that tax on savings income is, and how it wasn't before.

I presume you mean that someone with £40,000 earned income, £1,000 savings income and £2000 dividend income pays no tax on the savings income but if the dividend income is £2001, there is 20% tax to pay on £500 of savings income (£100), and still no tax on the dividend income?

That's not explained on the page you linked to.

Could, but I'm no teacher, and Colsten is certainly no pupil of mine..

The fact that the link I gave and the quotes I extracted - one stating that the individuals PSA will be a function of their adjusted net income, and the other that the computation of that will involve dividend income - weren't enough to get Colsten over his misunderstanding means that I'm only too happy to hand over to you

polymaff

colsten wrote: »

Originally Posted by Eco Miser
Previously, dividend income was assessed after savings income, and there was no way dividend income could change the tax on savings income. Now it can.


It's because dividend income will also count towards your taxable income. For the purposes of savings tax, there is no reason to treat it any different to other items that count towards your taxable income.

No. Eco Miser understands it - read and try to understand the Eco Miser quote you responded to with the above lack-of-understanding.

colsten

polymaff wrote: »

Could, but I'm no teacher, and Colsten is certainly no pupil of mine..

Thank goodness for that

colsten

polymaff wrote: »

The fact that the link I gave and the quotes I extracted - one stating that the individuals PSA will be a function of their adjusted net income, and the other that the computation of that will involve dividend income - weren't enough to get Colsten over his misunderstanding means that I'm only too happy to hand over to you

Nowhere in the link you provided is the word "function" even mentioned. What it actually says is "From 6 April 2016 the amount of any Personal Savings Allowance you’re entitled to will be based on your adjusted net income" - something that makes perfect sense.

To turn this into ".....tax paid on savings income will be a function of dividend income", as you did, is just utter nonsense.

BTW, I am a she.

Eco_Miser

colsten wrote: »

Nowhere in the link you provided is the word "function" even mentioned. What it actually says is "From 6 April 2016 the amount of any Personal Savings Allowance you’re entitled to will be based on your adjusted net income" - something that makes perfect sense.

To turn this into ".....tax paid on savings income will be a function of dividend income", as you did, is just utter nonsense.

BTW, I am a she.

You're just arguing about the meaning of phrases which are actually synonyms in this context.



"... is a function of ..." and "... is based on ..." have the same meaning. Polymaff obviously prefers the more mathematical phrase.

Eco_Miser

colsten wrote: »

It's because dividend income will also count towards your taxable income. For the purposes of savings tax, there is no reason to treat it any different to other items that count towards your taxable income.

That's right!
But it's new with the PSA. Previously dividend income did not affect the tax on savings income (well not until the PA got reduced).
The level of the PSA is a function of net taxable income, which itself is a function of dividend income, and of savings income, and of other income, and of gift aid donations, and of pension contributions.

colsten

Eco_Miser wrote: »

That's right!
But it's new with the PSA. Previously dividend income did not affect the tax on savings income (well not until the PA got reduced).

I have been aware of the change in dividend taxation since it was announced in the budget.

Eco_Miser wrote: »

The level of the PSA is a function of net taxable income, which itself is a function of dividend income, and of savings income, and of other income, and of gift aid donations, and of pension contributions.

I absolutely agree that the level of the PSA is a function of net taxable income because it is, and it's what the law says. But I repeat that it is utter nonsense to say "tax paid on savings income will be a function of dividend income" because it isn't, and it's not what the law says.

I'll not change my view on this and I'll leave the debate at this stage.