Changes to dividend taxation

From 6 April 2016, the dividend tax credit will be replaced by a new dividend allowance in the form of a 0% tax rate on the first £5,000 of dividend income per tax year.

Over the £5,000 allowance divideneds will be taxed at the following rates: -

- 7.5% on dividend income within the basic rate band.  This will mean that if you take dividends to the maximum within the basic rate band you will have a tax bill.

- 32.5% on dividend income within the higher rate band; and

- 38.1% on dividend income within the additional rate band.

Please contact us for clarification on your own personal circumstances

Other points


Dividends received on shares held in an individual savings account (ISA) will continue to be tax-free.

The dividend allowance will apply to dividends received from UK resident and non-UK resident companies.

Added By: Luke Noble on 21st Mar 2016 - 16:47
Last Updated: 22nd Mar 2016 - 15:31

Number of Views: 1149
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