Ask Money: where do I pay tax on dividends?

Stephanie Tremain of Blick Rothenberg helps a reader with a question about tax.

September 12, 2019

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.

If you need help with a tax, pension or financial planning problem, please email:

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