2016/17 Self Assessment & Dividends

Enterprise_Warrior

Hi Everyone

As we are yet to complete a Self Assessment return for this tax year, I am still unsure as to how the tax will work on the dividends above £5k.

If a person only used £8,164 of their £11k personal allowance for PAYE, are they allowed to take up to £7,836 in dividends before paying tax on the rest or will they only get £5k tax free and lose the rest of the personal allowance?

Thanks

EW

MarieNoelle

If the individual's income is £8,164 the first £2,836 of dividends are covered by the PA and another £5,000 of dividends are taxed at 0%.

See example 3 here.

Hope this helps.

Enterprise_Warrior

Thanks Marie. Was hoping that was the answer.