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In the walkthough for this question (final 3 mins ) https://www.youtube.com/watch?v=ygPf9zRw6hs
We establish that the new adjusted basic rate band after gross gift aid contributions is £40,200. Non-savings income is only £32,430, so we can apply the basic rate band to savings and dividend income.
However, in the video lecture, the nil-rate band for both savings and dividend income is included when the lecturer is calculating when we must move over to the higher rate band.
I thought that the nil-rate band amounts weren’t included when calculating the point in which the basic rate band is used up. Please can you clarify?
Many thanks
NRB is 40,200
Non-savings – 32,430
Savings 500
3,500 – all at BR
Dividend income is where the client goes from BR to HR
so
1000 @0% – DNRB
then 3,270 @BR – this brings the total income taxed to the BRB of £40,200
so the balance of the dividend income 2,730 is taxed at HR
The Savings and Div NRB still use up the BRB
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