Dividend break reduced from £5k to £2k
14th Mar 2017
Launched in the Spring budget 2016 by then Chancellor George Osborne, the £5,000 tax-free dividend allowance to encourage shareholder investment is to be slashed to £2,000 from April 2018.
Announced in last week's Budget., the dividend allowance cut to £2,000 will cost basic rate taxpayers approximately £225, higher rate taxpayers around £975 and additional rate taxpayers in the region of £1,143 a year.
'The cut from £5,000 to £2,000 will make it even more important that investors make full use of the tax allowances available through ISAs and SIPPS [Self-Invested Personal Pensions].
'In particular investors will need to think carefully about which investments they hold inside and outside of tax wrappers. They will want to ensure that high dividend paying investments are held within Isas and Sipps to minimise the impact of the dividend allowance cut.”
If you're concerned how the budget changes may affect you and your business talk to us about the best way to minimise your tax liability.
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