Changes to Dividend Taxation

Topic Author:

Claire Turner

Topic posted on:

9:19 GMT 10.12.15

Post Author Date

As announced in the Summer Budget 2015, legislation will be introduced in Finance Bill 2016 to repeal the dividend tax credit and introduce a new dividend allowance and new rates of income tax on dividends. Individuals will pay no tax on the first £5,000 of dividend income. The rates of income tax on dividends received above the allowance will be changed to:

  • 7.5% for dividends taxed in the basic rate band
  • 32.5% for dividends taxed in the higher rate band
  • 38.1% for dividends taxed in the additional rate band

The Dividend Allowance is in addition to the provisions for Individual Savings Accounts (ISAs) and the tax-free personal allowance.

If you would like to discuss this further, please contact a member of the Beavis Morgan personal tax team on 020 7417 0417.

Claire Turner

09:32 GMT 10.12.15