Another Personal Tax question help !!!

alexp19740

Brian receives income from ISA, Building Society Account, Dividends. Her other income before Personal Allowances have been deducted is £35000 for 2013-14. His other income is as follows:-

Income from ISA = 1400
Interest from Building Society = 5500
Income from Dividends = 1800

Calculate for each Income type:-

1. Tax deducted at source
2. Any additional tax payable

It is the spilt between additional tax on the Interest and Dividends I am struggling with.

CeeJaySix

Alex,

Take the personal allowance off the other income.
Deduct the remainder from the basic rate band to calculate how much of that band remains.
Gross up the interest (x100/80) and the dividends (100/90) - you may have done this already when calculating the tax deducted at source.
Tax the gross interest at the same rates as normal income (20% in basic rate band, 40% above).
Tax the gross dividends at 10% for any basic rate band left, or 32.5% above it.

To work out the ADDITIONAL tax on interest and dividends, deduct the tax deducted at source (which I assume from your original post you have no problem calculating) from the tax charge on each as calculated above.

alexp19740

Thanks Cee-Jay that has been a great help.