Gareth Jones

The Finance Act 2000 introduced a new tax relief to taxpayers who give away listed shares to charity. However, problems can arise in particular with taxpayers whose income which is taxable at the higher rate consists exclusively (or mainly) of dividends. This will typically be a relatively wealthy retired individual, with little or no pension. Dividends are always treated as forming the top part of a taxpayer's income, and so other forms of income such as bank interest will only be taxable at the higher rate if they exceed the taxpayer's allowances and higher rate threshold.