Chapter 4 - Taxation of Dividend Income

Question 1

What is a dividend?

Answer 1

A distribution of profit by a company to its shareholders

Question 2

When are dividends taxed?

Answer 2

After non-savings income and interest

Question 3

True or false

The dividend ordinary rate is 9%

Answer 3

False

The dividend ordinary rate is 8.75%

Question 4

What is the dividend upper rate?

Answer 4

The dividend upper rate is 33.75%

Question 5

What is the dividend additional rate?

Answer 5

The dividend additional rate is 39.35%

Question 6

What is the dividend allowance for 2024/25?

Answer 6

£500

Question 7

True or false

Only basic rate taxpayers are entitled to the dividend allowance

Answer 7

False

All taxpayers are entitled to the dividend allowance

Question 8

Where does the dividend nil rate apply?

Answer 8

Where the dividend falls within the dividend allowance (i.e is less than £500)

Question 9

True or false

Where there is left over personal allowance, it can be used to be offset against savings income in priority

Answer 9

True

The personal allowance can be used to bring the level of taxable savings income to the amount of the staring rate band plus the available savings allowance