Tax on dividends and savings interest
5 chapters·15 min·action plan·mastery check
Chapter 1 of 5
The idea
High interest rates are great — until your savings interest goes over the tax-free limit.
Two kinds of investment income
Interest comes from savings accounts and bonds. Dividends come from shares and funds. Many countries have small tax-free amounts for each, then tax the rest. Anything held in tax-free accounts is usually outside these rules.
Predict first
$20,000 in savings at 4.5% interest. A basic-rate UK taxpayer has a $1,000 personal savings allowance. Taxable interest?
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