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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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if my income is £30000 per year and i get a dividend of £75000

Resolved Question:

if my income is £30000 per year and i get a dividend of £75000 what is the additional tax to pay?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

Is the £30,000 your salary? Will the dividend be paid in the current tax year, 2013/14?
Customer: replied 3 years ago.

Yes salary £30000 dividend paid 2014/15 from a limited company i am a joint shareholder in but draw no salary

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.

Hi again.

If your total income is over £100,000 in 2014/15, then you will lose £1 of the personal allowance for every £2 of income over £100,000. As your income will be £113,333 (£30,000 + £75,000 + £8,333 tax credit), you will be left with £3,333 of your £10,000 personal allowance. The loss of £6,667 of your personal allowance will cost you £2,833 in tax.

The 20% tax band covers the first £31,865 of taxable income. Of that, £26,667 will be used by the taxable part of your salary (£30,000 - £3,333). The balance of £5,198 will cover the first £5,198 of your £83,333 dividend and that will be taxable at the lower dividend rate of 10% (£519.80). The balance of the dividend of £78,135 (£83,333 - £5,198) will be taxable at 32.5% (£25,393.88). The total tax liability on the dividend will, therefore, be £25,913.68. Deduct the 10% tax credit of £8,333.33 and you are left with a net liability on the dividend of £17,580.35. This will be payable on 31 January 2016.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15880
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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