Share divis and tax bands.

[Gordon Brown]

As I recall, in 2007/8 tax on dividends is 10% up to the £34,601?

So, if I pay myself £5,600 (the tax free allowance) and then £29K in share dividends (which takes me to the £34,600) what is the part that is taxable at 10%?

[Gordon Brown]

Have I misread this? Is the point at which the 32.5% tax rate on dividends become payable at £34,600 PLUS the £5,600? so £40,200?

[Gordon Brown]

That is the first time anyone has even got close to explaining that for me, thanks Eric.

So basically if I intend to draw £40K HMRC will assume it is £44K. To keep under the £40K I should draw only £36.5K which HMRC will see as £44,150.


And I will pay 32% on anything over that figure, bearing in mind to add any BIK and any savings interest?

Edited by Gordon Brown on Sunday 10th February 16:32