But to the recipient the dividend arrives as if it has already had basic rate income tax paid.

FORBES: This Might Not Be The Best Time To Be Investing For A Dividend Income

In the UK dividends are paid out of post tax profit, as in the US. However, that tax that had been paid on the corporate profits becomes, to the dividend recipient, a tax credit.

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The US system, until the Bush cuts, taxed the dividend at the corporate level and then again at regular income tax rates for the recipient.

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