Question on Personal Tax CBA2012

Clareymary

Hi

Can anyone help with working out the answer to this question please? I just can't see how they got the answer!!

"2 taxpayers each receive 1000 gross from dividends, below are the details of their other total income, net of personal allowance
required - calculate the total tax paid on their dividends
A) net income 33970
b) net income 187000

the answer for the tax payable on dividends is 235 for A and 425 for B

How was this calculated? Thanks

Jade95

Hi

I did this paper this morning as my exam is tomorrow.

This is how I worked out B...

187000-8105 (personal allowance) = 178895 which means that this income falls under the Additional tax bracket so the dividend is taxed at 42.5%.
1000/100*42.5 = 425.

For A I'm not too sure how they've worked it as I thought it would be 100 tax. So I can't help you with that one.

Hope this has given you a bit of help.

Jade

Rudd

34370-33970= 400 x 10%= 40
41000-400 =600x 32.5%= 195

which add up to 40 + 195 =235

hope this helps