Originally posted by Craig@Clarity
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Dividend tax limit
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Originally posted by Manic View PostYou can't choose to allocate your PA against dividend income.
Personal Allowances and Dividend Income
Allocating £2k of your personal allowance to dividends doesn't change the order in which they are taxed - they are still taxed as the top slice of income and the extra £2k does still sit above the higher rate threshold, but because you've allocated £2k of your personal allowance to the first £2k, that £2k above the higher rate threshold now becomes the first £2k of taxable dividends and is therefore covered by the £2k dividend allowance.
Whether or not HMRC's own self-assessment software now does this automatically for you I do not know.
Edit: from the horse's mouth, example 6:
Dividend Allowance factsheet - GOV.UKLast edited by TheCyclingProgrammer; 23 February 2020, 15:50.Comment
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Originally posted by TheCyclingProgrammer View PostYes you can, as Craig outlined. Taxpayers are allowed to use their personal allowance in whichever way is most beneficial to them.
Personal Allowances and Dividend Income
Allocating £2k of your personal allowance to dividends doesn't change the order in which they are taxed - they are still taxed as the top slice of income and the extra £2k does still sit above the higher rate threshold, but because you've allocated £2k of your personal allowance to the first £2k, that £2k above the higher rate threshold now becomes the first £2k of taxable dividends and is therefore covered by the £2k dividend allowance.
Whether or not HMRC's own self-assessment software now does this automatically for you I do not know.
Edit: from the horse's mouth, example 6:
Dividend Allowance factsheet - GOV.UKComment
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