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Where Taxpayers and Advisers Meet

Tax on pension + dividends

jakeypaul
Posts:8
Joined:Wed Apr 10, 2024 3:33 pm
Tax on pension + dividends

Postby jakeypaul » Wed Apr 10, 2024 4:54 pm

Hi all.
I'm new to the forum and was wondering if I could get some help please?
During the tax year 2023-24 my wife received a small Government pension of £1,297 + state pension of £10,338. She also received £3,066 in investment dividends and £170.00 in bank account interest. Total £14,871.

Have I done this correctly?
£14,871
minus £12,570 P.A
minus £1,000 Dividend Allowance
= £1,301 @ 20% tax.
Therefore £260.20 tax to pay?

D&C
Posts:170
Joined:Mon Nov 25, 2019 11:35 pm

Re: Tax on pension + dividends

Postby D&C » Thu Apr 11, 2024 8:57 pm

Not quite no.

Firstly there is no separate allowance for dividends in the way you have shown it.

Secondly the answer below assumes your wife has not applied for Marriage Allowance.

Her non savings non dividend income is £11,635 and that uses up most of her Personal Allowance, leaving £935 which can set against the dividend income.

That leaves a total of £2,301 remaining to be taxed.

Of the income left to be taxed the interest is taxed first and the £170 would be taxed at 0% (the savings starter rate).

That leaves £2,131 of dividend income, which would be taxed like this,

£1,000 x 0% (dividend nil rate)
£1,131 x 8.75% (dividneds basic rate)

Total tax payable is £98.96

jakeypaul
Posts:8
Joined:Wed Apr 10, 2024 3:33 pm

Re: Tax on pension + dividends

Postby jakeypaul » Fri Apr 12, 2024 12:07 pm

C&C
Think you for the information. No my wife can’t apply for marriage allowance since we are both on state pensions + small amounts of dividends so that’s the allowance gone.
I’m not the best at working these things out so I hope the self assessment form won’t be too complicated.
Again thank you.

D&C
Posts:170
Joined:Mon Nov 25, 2019 11:35 pm

Re: Tax on pension + dividends

Postby D&C » Fri Apr 12, 2024 3:08 pm

I don't know where Self Assessment fits into this, nothing you have posted suggests your wife meets the criteria to need to file a tax return.

She just needs to notify HMRC of her income (the specific different elements, not a single total figure) and they will calculate the tax due.

She is likely to be sent a Simple Assessment calculation and had until 31 January 2925 to pay what's due (or 3 months after the calculation is issued if it's November 2024 or later when it's issued).

In reality just details of the interest and dividends should be sufficient as the State Pension is already noticed by DWP as will her occupational pension.

D&C
Posts:170
Joined:Mon Nov 25, 2019 11:35 pm

Re: Tax on pension + dividends

Postby D&C » Fri Apr 12, 2024 3:09 pm

That should be 2025, not 2925 :o

jakeypaul
Posts:8
Joined:Wed Apr 10, 2024 3:33 pm

Re: Tax on pension + dividends

Postby jakeypaul » Mon Apr 15, 2024 6:01 pm

I think it's making since now.
Thank you for your help.

jakeypaul
Posts:8
Joined:Wed Apr 10, 2024 3:33 pm

Re: Tax on pension + dividends

Postby jakeypaul » Tue Apr 16, 2024 10:39 am

Sorry makes sense.


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