HM Treasury’s United Kingdom Budget 2007

Grant Thornton

Grant Thornton

Taxation of Dividends

  • On the gross amount1 at the rate of
    • 10% for starting and basic rate taxpayers (liability covered by tax credit)
    • 32½% for higher rate taxpayers ( equivalent to effective rate of 25% of dividend received)
    • 32½% for discretionary and accumulation and maintenance trusts – equivalent to effective rate of 25% of dividend received2
  • Shareholders are not entitled to repayment of tax credits
  • From 1 January 2007 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, for 2005/2006, income does not exceed the trust standard rate band of £1,000.

The figures shown here are subject to ammendment as the Finance Bill passes through Parliament.

This information has been prepared only as a topical guide to tax and personal financial matters. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material contained in this publication.

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