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Posted Wed, 23 Oct 2024 11:16:10 GMT by George
I am a basic rate taxpayer. In the tax year ending 2021, I believe the dividend allowance was £2,000. In that year, I received £2,000 in dividends and interest from savings of £1,485. Total income was £15,018, which is £2,518 over the personal allowance of £12,500 at the time. My calculations indicate that no tax would have been payable because the £2,000 dividend allowance would reduce the taxable income to £518 and this does not exceed the starting rate of £5,000. Is that correct? Thank you in advance for your reply.
Posted Wed, 30 Oct 2024 08:25:45 GMT by HMRC Admin 19 Response
Hi,
Your dividend allowance of £2000 covers your dividend income of £2000, making this tax free.
Your interest from savings is covered by your personal savings allowance of £1000, and starting rate for savings of £5000, both of which are tax free allowances, covering savings interest.
If the rest of your income totals £11,533, this will be covered by your tax free allowance of £12,500. 
Thank you.

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