2016/17 Self Assessment & Dividends

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Enterprise_Warrior
Enterprise_Warrior Registered Posts: 77 Regular contributor ⭐
edited June 18 in General member discussion
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
FMAAT, AAT Licensed Accountant and CIMA finalist

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  • MarieNoelle
    MarieNoelle Registered, Moderator Posts: 1,303
    edited March 2017
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    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
    Enterprise_Warrior Registered Posts: 77 Regular contributor ⭐
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    Thanks Marie. Was hoping that was the answer.
    FMAAT, AAT Licensed Accountant and CIMA finalist

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