The budget saw the chancellor announce a new dividend tax starting from 1st April 2016.
New DIVIDEND TAX from 1st April 2016
This will bring about a change in the taxation of dividends and the abolishment of the Dividend Tax Credit. There will be a new Dividend Tax Allowance of £5000.00 per annum which will make dividends up to this level effectively tax free. Over and above this level dividends will be taxed depending on your level of earnings. For dividends falling in the basic rate band there will be a charge of 7.5%, for dividends falling in the higher rate band the rate is 32.5% and for dividends in the additional rate band the rate is 38.1%
Any one extracting dividends from a company could be affected by these new measures and shareholders would be well advised to look at their situations and take advice on how the changes may impact on them.
Please call if you would like to discuss this or any issue. We are happy to offer a free 1 hour meeting to go over any issues or questions you have.