Tax on Pension, Savings & Dividend

sabelu

I currently take my tax free allowance annually from my SIPP but have c12k savings interest and 1k share dividend outside of my SIPP. I find the new savings and dividend tax rules confusing based on these figures would i be liable to any tax. How would this be recovered? Do i need to submit a return?

Dazed_and_C0nfused

sabelu said:

I currently take my tax free allowance annually from my SIPP but have c12k savings interest and 1k share dividend outside of my SIPP. I find the new savings and dividend tax rules confusing based on these figures would i be liable to any tax. How would this be recovered? Do i need to submit a return?

From what you've posted yes, you will liable to pay some tax and you will need to complete a Self Assessment return.

After your Personal Allowance the remaining income will be taxed as follows (for 2023-24),

Interest
£5,000 x 0% = £0
£1,000 x 0% = £0
£6,000 x 20% = £1,200

Dividends
£1,000 x 0% = £0

Total tax payable £1,200

This would be payable on 31 January 2025 along with £600 towards whatever tax is owed for 2024-25 (plus a further £600 on 31 July 2025)

Keep_pedalling

£12k of interests suggests you are holding over £200k in cash, why not stop drawing down on the SIPP for a while and use your excess cash savings to live on for a few years?

EthicsGradient

Note that the zero rate tax band for dividends for this 23-24 tax year is £1,000, which exactly matches your estimated share dividends; in 24-25, that band decreases to £500.