Budget 2011 – Annual tax rates and allowances

Taxation of Dividends - Budget 210 - GT

Taxation of Dividends

  Actual rate on the gross amount1 Effective rate on dividend received
Savings rate taxpayers 10% nil
Basic rate taxpayers 10% nil
Higher rate taxpayers 32.5% 25%
Additional rate taxpayers 42.5% 36.1%
Discretionary trusts 42.5%2 36.1%2
  • Shareholders are not entitled to repayment of tax credits
  • Availability of 10% tax credit on dividends from overseas companies depends on certain conditions.
  • 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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