Dividend Calc

[deltaforce1]

If I earn a Gross salary of £30,000 and I withdraw a £200,000 dividend, how much dividend tax am I liable for?

[deltaforce1]

I used a website to work the dividend tax out, but the figure is different to the figure I came up with just applying the dividend rates.

does how much you earn affect how much dividend tax you pay? Its all very confusing to me

[section 44]

Effectively higher rate taxpayers pay tax at 25% on dividends, additional rate taxpayers at 36.1% and everybody else no tax.

[deltaforce1]

So what are the rates 10%, 32.5% and 42.5% about?

[section 44]

They are the actual rates of tax for dividends but, as a result of the credit equal to one ninth of the dividend paid:

Effectively higher rate taxpayers pay tax at 25% on dividends, additional rate taxpayers at 36.1% and everybody else no tax.

[deltaforce1]

They are the actual rates of tax for dividends but, as a result of the credit equal to one ninth of the dividend paid:

Effectively higher rate taxpayers pay tax at 25% on dividends, additional rate taxpayers at 36.1% and everybody else no tax.

what do you mean by credit equal to 1/9 of the dividend paid?

[section 44]

A dividend paid carries a non-refundable credit equal to one ninth of it.

E.g. a company pays a dividend of £100

The individual recipient is deemed for tax purposes to receive a dividend of £111 (i.e. the dividend paid plus a credit equal to one ninth).

The individual is then taxed at the appropriate rate, say 32.5% for a higher rate taxpyer meaning that he is left with £75 after tax (the tax being settled, in part, by the credit).

[towat]

Put simply(ish) you will pay 25% on the NET dividend between £35k and £150k and 36% on anything over £150K.

[deltaforce1]

Put simply(ish) you will pay 25% on the NET dividend between £35k and £150k and 36% on anything over £150K.

What percentage do I pay on dividends below £35k?

[Incredulum]

nil.

(But you have 30k income less annual allowance of 7,475) so only on the bit between 22,525 and 35k.