dividend question

by **georgers** on Thu Jan 26, 2012 9:03 pm

hi what is the tax breakdown for £5200 wages and £35000 dividend for the tax year 10/11. the £35k is the actual amount i recieved i dont understand the tax credit thing that well so any advice would be helpfull. what do i put on the tax return £35k or £38500? i am 48 and married
thanks

by **maths** on Fri Jan 27, 2012 12:43 am

Not sure i follow the query.

A net dividend of 35,000 equates to a gross dividend of 38,889.

by **georgers** on Fri Jan 27, 2012 10:33 am

my mistake, i added on 10% instead of 1/9th.
anyway the question is what is the tax breakdown for those amounts, how much tax is payable and what is the calculation?
thanks

by **section 44** on Fri Jan 27, 2012 1:46 pm

About £48.

by **pqtaxation** on Fri Jan 27, 2012 5:08 pm

to give you, as requested, the basis for the calculation of about £48

5200 wages and 38,888 gross dividends

Set personal allowance of 6475 against 5200 wages leaves 1275; set this 1275 against 38,888 gross dividends leaves taxable income of 37,613; of this 37,400 is basic rate band with no additional tax payable owing to dividend tax credit and balance of 213 taxed at 32.5% upper dividend rate (less 10% dividend tax credit) = about £48.