Tax Query
System
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Hi
I know that dividends paid to an individual shareholder is subject corporation tax at not less than 19%.
However, how is this income treated with respect to the Income Tax liability of the recipient?
Thanks in advance for your help.
I know that dividends paid to an individual shareholder is subject corporation tax at not less than 19%.
However, how is this income treated with respect to the Income Tax liability of the recipient?
Thanks in advance for your help.
0
Comments
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Re:Tax Query
Dividends are paid with a 10% tax credit. For example if someone receives a £90 dividend then they'll enter it on their tax return as £100 gross, with a £10 tax credit.
If they are a basic rate tax payer then no further tax is due, if their earnings are within the personal allowance then the £10 is not refunded to them, and if they're a higher rate tax payer then dividends are treated as the 'top slice' of income and taxed at 32.5% (less the 10% tax credit).
Jodie0 -
Re:Tax Query
Brilliant, that answers my query exactly. Thanks!0