TSEM5620 - Trusts for particular purposes: compensation under ESC A68 - example using dividend income - years to 2009-2010
The trustees must meet the conditions of the concession (TSEM5610).
This is how to calculate relief on dividend income.
Income and tax rates | Amount | Total |
---|---|---|
Tax pool brought forward |
- |
Nil |
Dividend received |
£90,000 |
- |
Tax credit |
£10,000 |
- |
Gross income |
£100,000 |
- |
Tax due on standard rate band (10%) |
£100 |
£100 |
Tax due at (dividend trust rate) (32.5%) |
£32,175 |
£32,175 |
Less non-payable tax credit |
- |
£10,000 |
Income available for distribution |
£67,725 |
- |
Total tax pool |
- |
£22,275 |
Amount distributed subject to PAYE |
£67,725 |
- |
The compensation payable to trustees is the lesser of
Tax due | Amount | Total |
---|---|---|
|
£67,725 @ 40% = |
£27,090 |
|
- |
£22,275 |
The compensation payable is therefore |
- |
£22,275 |