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income is generally treated as the highest part of total income.
A 10% starting rate, for savings income only, applies to the
extent that such income falls within the first £2,440
of taxable income (£2,320 for 2008/2009) If taxable
not-savings income exceeds this limit, the 10% rate does not
apply. Income from dividends is taxed at
10% within the starting and basic rate tax bands and at 32.5%
thereafter (these rates are applied to the dividend grossed-up
by a tax credit of 1/9).
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