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If your taxable Non savings income is £2k, savings income £10k and dividend income is £40k, obviously a higher rate tax payer are you still eligible for the proportion of the £5k zero rate allowance on interest i.e. £3k at 0% as your NS income is less than £5k
Yes
The 0% starting rate band will be applicable to the first £3,000 of savings income which falls into the first £5,000 of taxable income.
As the taxpayer is a higher rate taxpayer a £500 savings income nil rate band is then available with the remainder of the savings income falling in the basic rate band and being taxed at 20%.
Dividend income will have the first £5,000 at nil rate with the balance in the basic rate band taxed at 7.5% and the amount in the higher rate band taxed at 32.5%@Taxtutor said:
Yes
The 0% starting rate band will be applicable to the first £3,000 of savings income which falls into the first £5,000 of taxable income.
As the taxpayer is a higher rate taxpayer a £500 savings income nil rate band is then available with the remainder of the savings income falling in the basic rate band and being taxed at 20%.
Dividend income will have the first £5,000 at nil rate with the balance in the basic rate band taxed at 7.5% and the amount in the higher rate band taxed at 32.5%Hi, I cant seem to understand your response.
I watched the Income Tax part earlier in the year before march and didnt see anything about a 500pounds nil rate band. Kindly assist. Was there an update to the income tax lectures and rate?Do I have to watch all the videos again? Oh my! thats a long one.
Regards
The June exam is based on FA 2016 and you will definitely have to work through all of chapters 2 and 3 in the income tax section.
Chapter 2 is indeed “a long one”! Enjoy!
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