Budget 2008

Taxation of Dividends - Budget 2008 - GT

Taxation of Dividends

  • On the gross amount1 at the rate of
    • 10% for savings rate (starting rate 2007/2008) and basic rate taxpayers such that liability covered by tax credit
    • 32½% for higher rate taxpayers giving an effective rate of 25% of dividend received
    • 32½% for discretionary and accumulation and maintenance trusts (giving an effective rate of 25%of dividend received)2.
  • Shareholders are not entitled to repayment of tax credits
  • Availability of 10%tax credit on dividends from overseas companies depends on level of shareholding.
    Certain distributions from real estate investment trusts are treated as UK property income rather than dividend income (unless recipient resident in a country with a tax treaty with the UK).

1 Dividend received plus tax credit.
2 Unless income does not exceed £1,000.

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