Given the significant changes to dividend tax that came into effect in April 2016 it’s even more important to track personal tax liabilities throughout the year.
Click the new link “Personal Dividend Tax” on your dashboard for an overview of the year so far.
Generally speaking, the first £5K of dividends received will be tax free. Then dividends will be taxed at 7.5% until you are a higher rate tax payer (£43K gross) after which dividends are taxed at 32.5%. Dividends received at the top rate of tax (£150K+) are taxed at 38.1%.
Dividend tax is calculated on your self assessment tax return filed by Jan 31st each year.
As the tax is a personal liability, it’s important to understand how much should be saved (in a personal savings account) ready for your tax bill.