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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.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.0 -
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..0 -
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
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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.0 -
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.0 -
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
Saving money for well over half a century0 -
That's right!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.
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.Eco Miser
Saving money for well over half a century0 -
I have been aware of the change in dividend taxation since it was announced in the budget.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 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.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'll not change my view on this and I'll leave the debate at this stage.0
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