Discussion
Ok, I have a normal day job which I warn 33k and pay tax via paye. Simples.
In 5 days I will be receiving £75k via a dividend payment from a company I invested in.
Looking online it seems I need to pay 32% tax. Can someone confirm this is correct. I assume next year I will need to complete a self assessment tax return.
Is there anyway to pay less, can some of this go to my un married partner instead of me to help lower the tax bill?
In 5 days I will be receiving £75k via a dividend payment from a company I invested in.
Looking online it seems I need to pay 32% tax. Can someone confirm this is correct. I assume next year I will need to complete a self assessment tax return.
Is there anyway to pay less, can some of this go to my un married partner instead of me to help lower the tax bill?
craig51 said:
Ok, I have a normal day job which I warn 33k and pay tax via paye. Simples.
In 5 days I will be receiving £75k via a dividend payment from a company I invested in.
Looking online it seems I need to pay 32% tax. Can someone confirm this is correct. I assume next year I will need to complete a self assessment tax return.
Is there anyway to pay less, can some of this go to my un married partner instead of me to help lower the tax bill?
Several 'No's on this one.In 5 days I will be receiving £75k via a dividend payment from a company I invested in.
Looking online it seems I need to pay 32% tax. Can someone confirm this is correct. I assume next year I will need to complete a self assessment tax return.
Is there anyway to pay less, can some of this go to my un married partner instead of me to help lower the tax bill?
If you go over 100k you will pay a hell of a lot more than 32% - it's 32.5% the figure you're thinking of - and some of it will be at 60% effectively.
Assets can be easily transferred between spouses - your's is not one.
Best to delay the payment if possible until the 6th April onwards - or even better go 50:50 between now and then.
Happy to be corrected by Eric and the Accountants
Mmmmm. So on my total income ( paye and dividend) it equates to 60%. But if we take just the dividend part is it not 32% ?
In terms of delaying, not possible. I am due to receive the same this time next year!!, the company is paying the dividend to a solicitor! and they will then divvy it up and pay out to me to my bank account.
Will be hitting my bank in 5 days, just found out today.
In terms of delaying, not possible. I am due to receive the same this time next year!!, the company is paying the dividend to a solicitor! and they will then divvy it up and pay out to me to my bank account.
Will be hitting my bank in 5 days, just found out today.
craig51 said:
Mmmmm. So on my total income ( paye and dividend) it equate to 60%.
In terms of delaying, not possible. I am due to receive the same this time next year!!, the company is paying the dividend to a solicitor! and they will then divvy it up and pay out to me to my bank account.
Nope - only that portion which falls in the above bracket. A small amount will be at 10% then a lot at 32.5% as you say.In terms of delaying, not possible. I am due to receive the same this time next year!!, the company is paying the dividend to a solicitor! and they will then divvy it up and pay out to me to my bank account.
You lucky boy !!!
craig51 said:
Good man cool, that's roughly what I figured. Am I right in saying I can hold off on paying the tax until next year, might as well get the benefit from it in terms of interest!
You won't be paying the tax for quite some time on the self assessment route - I would guess at January 2015 then on account every July and January thereafter.Be aware that if I were to pay a £75k dividend to myself, HMRC would gross it up to £83.3k to establish my full income, before taking the 10% back off.
Hopefully one of the finance guys will jump in shortly to confirm all is well - EricMc and sumo69 are great in this area.
I am burning the midnight oil as away next week.
The OP would gain a small saving and a years cash flow benefit on paying his tax if the payment date is on or after 6 April 2014 - that is the first important point.
A significant issue is that the level of your gross income (£116133) would mean that you would loose most of your tax-free personal allowance. This would reduce to £1833 from £10000 in 2014/15 or £1273 from £9440 in 2013/14.
Total tax due is £24756.38 (this includes tax on salary) so whatever hasn't been collected via PAYE would be due 31 January 2016 and a self-assessment return would be needed for tax year 2014/15.
If the dividend is paid on or before 5 April 2014 then the total tax would be £25003.25 with a due date of 31 January 2015 and a return for 2013/14 would be required.
There can be some lucrative planning done to reduce these liabilities but I would need info from the OP first:
- are you married and has the wife got an income (if so, how much?)
- can the share be re-registered into joint names
- are you willing to make pension contributions or charitable gift aid donations to reduce the gross income below £100k if the share cannot be re-registered.
Happy to help further if OP wants to PM me.
I am off to bed!
David
The OP would gain a small saving and a years cash flow benefit on paying his tax if the payment date is on or after 6 April 2014 - that is the first important point.
A significant issue is that the level of your gross income (£116133) would mean that you would loose most of your tax-free personal allowance. This would reduce to £1833 from £10000 in 2014/15 or £1273 from £9440 in 2013/14.
Total tax due is £24756.38 (this includes tax on salary) so whatever hasn't been collected via PAYE would be due 31 January 2016 and a self-assessment return would be needed for tax year 2014/15.
If the dividend is paid on or before 5 April 2014 then the total tax would be £25003.25 with a due date of 31 January 2015 and a return for 2013/14 would be required.
There can be some lucrative planning done to reduce these liabilities but I would need info from the OP first:
- are you married and has the wife got an income (if so, how much?)
- can the share be re-registered into joint names
- are you willing to make pension contributions or charitable gift aid donations to reduce the gross income below £100k if the share cannot be re-registered.
Happy to help further if OP wants to PM me.
I am off to bed!
David
Edited by sumo69 on Friday 28th March 03:35
I am burning the midnight oil as away next week.
The OP would gain a small saving and a years cash flow benefit on paying his tax if the payment date is on or after 6 April 2014 - that is the first important point.
A significant issue is that the level of your gross income (£116133) would mean that you would loose most of your tax-free personal allowance. This would reduce to £1833 from £10000 in 2014/15 or £1273 from £9440 in 2013/14.
Total tax due is £24756.38 (this includes tax on salary) so whatever hasn't been collected via PAYE would be due 31 January 2016 and a self-assessment return would be needed for tax year 2014/15.
If the dividend is paid on or before 5 April 2014 then the total tax would be £25003.25 with a due date of 31 January 2015 and a return for 2013/14 would be required.
There can be some lucrative planning done to reduce these liabilities but I would need info from the OP first:
- are you married and has the wife got an income (if so, how much?)
- can the share be re-registered into joint names
- are you willing to make pension contributions or charitable gift aid donations to reduce the gross income below £100k if the share cannot be re-registered.
Happy to help further if OP wants to PM me.
I am off to bed!
David
The OP would gain a small saving and a years cash flow benefit on paying his tax if the payment date is on or after 6 April 2014 - that is the first important point.
A significant issue is that the level of your gross income (£116133) would mean that you would loose most of your tax-free personal allowance. This would reduce to £1833 from £10000 in 2014/15 or £1273 from £9440 in 2013/14.
Total tax due is £24756.38 (this includes tax on salary) so whatever hasn't been collected via PAYE would be due 31 January 2016 and a self-assessment return would be needed for tax year 2014/15.
If the dividend is paid on or before 5 April 2014 then the total tax would be £25003.25 with a due date of 31 January 2015 and a return for 2013/14 would be required.
There can be some lucrative planning done to reduce these liabilities but I would need info from the OP first:
- are you married and has the wife got an income (if so, how much?)
- can the share be re-registered into joint names
- are you willing to make pension contributions or charitable gift aid donations to reduce the gross income below £100k if the share cannot be re-registered.
Happy to help further if OP wants to PM me.
I am off to bed!
David
Edited by sumo69 on Friday 28th March 23:38
Ok
Not married but living together
Share has already been paid, literally in-between bank accounts and will clear in my solicitor account today.
Re charity/pension, the problem I have is I plan to use this and next years dividend to buy a house in 2017 so need the cash for then. I also have 20k of savings in an iss just now.
My partner earns 26k and has 12k savings.
Pension is just through work.
If I bring it down to 100,000, what tax saving are we talking?
Not married but living together
Share has already been paid, literally in-between bank accounts and will clear in my solicitor account today.
Re charity/pension, the problem I have is I plan to use this and next years dividend to buy a house in 2017 so need the cash for then. I also have 20k of savings in an iss just now.
My partner earns 26k and has 12k savings.
Pension is just through work.
If I bring it down to 100,000, what tax saving are we talking?
Further to Sumo's late night/early morning calculations, I would expect that there would be a substantial Payment on Account required on 31 July 2015 in respect of tax year 2014/15 so on 31 January 2015 you could be looking at a payment to HMRC in excess of £30,000.
This would be the case if dividends of similar size are going to be received in successive years.
Be aware that a dividend of £75,000 is actually included in the tax calculations as a Grossed Up dividend of £83,333.
This would be the case if dividends of similar size are going to be received in successive years.
Be aware that a dividend of £75,000 is actually included in the tax calculations as a Grossed Up dividend of £83,333.
PurpleMoonlight said:
If you have the cash available make a pension contribution to bring down the total gross earnings to £100,000. But be quick as it needs to be done by 5th April.
This is the only way round it that I can think of, given the time restraints.Plan for next year...
1. Get Married.
2. Gift some of this investment to your wife.
craig51 said:
Is it not an option that when the solicitor calls to say they have it and ask for bank details, they could send half to me and half to my partner? Would that work?
Pointless.The tax liability on the dividends is the responsibility of the shareholder.
You can of course gift some of the shares to your partner, but I doubt you can do that retrospectively and you would need to consider CGT, and what happens if the relationship fails!
Edited by PurpleMoonlight on Friday 28th March 10:36
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