Tax on acc funds for an additional rate tax payer

[Unexpected Item In The Bagging Area]

I’m trying to get an idea of the tax situation for dividends and capital growth from acc funds held outside an ISA wrapper. I’m just curious as to whether it might be 45% of divis and growth above a threshold or something entirely different.

[xeny]

Something else.

Dividend taxation is set out pretty clearly here:

https://www.gov.uk/tax-on-dividends so 38.1% above your dividend allowance.

CGT is 20% once above your CGT allowance - see https://www.gov.uk/capital-gains-tax/rates

In my opinion holding inc funds and reinvesting dividends makes it easier to keep track of CGT vs dividend taxation, but that opinion is worth what you are paying for it.

[Eric Mc]

It's something entirely different

For 2018/19 the first £2,000 of dividend income is completely tax free.
Dividends that fall within the tax payer's Basic Rate Band are taxed at 7.5%.
Dividends that fall within the tax payers Higher Rate Band are taxed at 32.5%.
Dividends that fall within the tax payer's Top Rate Band are taxed at 38.1%.

You have to wonder where the Office of Tax Simplification were when these rules were dreamt up. Maybe they were on their lunch break.

https://www.gov.uk/tax-on-dividends

[Unexpected Item In The Bagging Area]

Thanks for the helpful replies. Unfortunately my brain turns to mush with things like this, it’s all so dull and generally poorly explained.

[Eric Mc]

Unexpected Item In The Bagging Area said:

Thanks for the helpful replies. Unfortunately my brain turns to mush with things like this, it’s all so dull and generally poorly explained.

Dull, but important to understand if you want to make a decision from a position of knowledge rather than ignorance.