Hello - I would be so grateful for your insights...
I refer to my personal income tax calculation of 2018/2019. I have employment income of £68k, interest income of £1k, and dividend income of £9k. I am then a higher rate tax-payer and would anticipate seeing the top slice of income in my calculation to be the £7k dividend income (£9k - £2k), taxed at 32.5%. However, £2k of my dividend income has been taxed at 0%, £7k taxed at 7.5% and then it's my employment income is the top slice at 40%.
HMRC advise the rule: "Any employment income over the upper rate band of £46,350 is subject to being taxed at the higher rate of 40%. Any dividend income received over the amount of £36,000 is subject to the upper rate band of 32.5%."
I was not aware there were two upper rate bands! Am I going mad (always a distinct possibility!)? I would be so grateful for someone's clarification. I have googled the life out of this but to no avail... Thank you so much!
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