Taxable dividend income above £500 in 2024

[DelianLeague]

Hello All,
I recently posted in the High yield section of this forum about potentially having to pay tax on dividend income from 2024 on a relatively small initial investment of £4000, two years ago. I decided that this post is better suited to here.
When I purchased the shares, it was in a slightly distressed bank that had paid no dividend for a while. This year it resumed the dividend and it has paid me £650.
So, in 2024, minus the £500 allowance I would pay 8.75% of £150 = £13.12

Putting aside the ISA/SIPP wrappers, am I correct in presuming that one would not pay any tax if any of the following scenarios were true?

1) That I had not used up my income tax personal allowance.
2) That the shares held were not UK shares and the tax had already been deducted at source.

……..can’t think of any other scenarios. Thanks, D.L.

[JohnB]

yes to both

[DelianLeague]

yes to both

Many thanks John.

D.L.

[Lootman]

yes to both

Regarding (2) I was under the impression that you only get an offset for foreign tax withheld if you are a higher rate taxpayer. Happy to be proven wrong.

[mearnsfool]

I have been paying basic rate tax towards the top end of the BR bracket for around 9 years and also receiving French dividends not in a ISA that have French withholding tax taken off the dividends at source.

I claim back the French withholding tax on my Self Assessment return.

I enter the gross dividend and the withholding tax in my UK tax return foreign section that you have to add on to your self assessment return when you start the return.

The Gross amount of tax that I have to pay including on the Gross Dividends is calculated by HMRC in the tax calc sheet. Then the next line is the reduction in tax I have to pay which amounts to the French Withholding Tax, that I have already entered in the foreign section.

I have been doing this for around 25 years and have not paid higher rate tax since the April 2011 tax return.

[SalvorHardin]

I have been paying basic rate tax towards the top end of the BR bracket for around 9 years and also receiving French dividends not in a ISA that have French withholding tax taken off the dividends at source.

I claim back the French withholding tax on my Self Assessment return.

I enter the gross dividend and the withholding tax in my UK tax return foreign section that you have to add on to your self assessment return when you start the return.

The Gross amount of tax that I have to pay including on the Gross Dividends is calculated by HMRC in the tax calc sheet. Then the next line is the reduction in tax I have to pay which amounts to the French Withholding Tax, that I have already entered in the foreign section.

I have been doing this for around 25 years and have not paid higher rate tax since the April 2011 tax return.

The same for me. I have (just) been a basic rate taxpayer ever since I retired (though I will be a higher rate taxpayer in 2023/24). Every year the withholding tax deducted from my American and Canadian dividends tax reduces my UK tax liability.

As mearnsfool says you enter the gross dividends, withholding tax and net dividends in the foreign section of the tax return (I'm still using paper forms as HMRC refuses to let me use their online system). I help HMRC by giving them a fairly detailed explanation in a covering letter (mostly because I always submit a capital gains tax return and I have gross dividends with no withholding tax from some other countries).

[mearnsfool]

I have been doing this for around 25 years and have not paid higher rate tax since the April 2011 tax return.

The same for me. I have (just) been a basic rate taxpayer ever since I retired (though I will be a higher rate taxpayer in 2023/24).[/quote]

Yes this fiscal drag trick is a bit of a pain, same with me.