Ask Money: Where do I pay tax on dividends?
Stephanie Tremain of Blick Rothenberg helps a reader with a question about tax.
17th September 2019 16:55
by Kyle Caldwell from interactive investor
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Stephanie Tremain of Blick Rothenberg helps a reader with a question about tax.
I am resident in Scotland, so I'm subject to Scottish tax rates. I have a state pension, an armed forces pension and dividend income. Can you please advise me whether, as a taxpayer in Scotland, I must pay Scottish rates on my total income or – as a friend suggested – Scottish rates on my pension income and English rates on my dividends? Garry Barnett, by email.
Stephanie Tremain, director, Blick Rothenberg, replies:
Your friend is correct. For taxpayers resident in Scotland, Scottish rates of income tax (currently up to 46%) determined by Scottish income bands apply to most sources of taxable income, including pension, employment and rental income. Dividend income and savings interest, however, are taxed at the same rates as they are in the rest of the UK.
It may be worth mentioning that HMRC is responsible for administering and collecting all UK tax, including Scottish income tax, should you need any direct assistance.
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This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.