What’s New?
In his Spring Budget 2017 the chancellor announced that from 6 April 2018 the tax free dividend allowance would reduce to £2,000 (previously £5,000).
Finance Act 2016 included legislation for major changes to dividend tax from 6 April 2016, which included the abolition of dividend tax credits – The main repeals: – ITTOIA 2005 ss 397-398, 400, 414, 421 re distributions and tax credits are repealed as is CTA 2010 s 1109 re certain distributions which has the effect of removing a tax credit on dividends received from companies and removes the increase in taxable income as a result of the credit. They also remove the treatment of non-qualifying distributions as having suffered tax at the dividend ordinary rate.
From 6 April 2016
| Tax band |
Tax rate on dividends over £5,000 |
||
| Basic rate (and non-taxpayers) | 7.5% | ||
| Higher rate | 32.5% | ||
| Additional rate | 38.1% | ||
2015/16 and earlier
| Dividend ordinary rate | Dividend upper rate | Dividend additional rate | |||
| 2015/16 | 10% | 32.5% | 37.5% | ||
| 2014/15 | 10% | 32.5% | 37.5% | ||
| 2013/14 | 10% | 32.5% | 37.5% | ||
| 2012/13 | 10% | 32.5% | 42.5% | ||
| 2011/12 | 10% | 32.5% | 42.5% | ||
| 2010/11 | 10% | 32.5% | 42.5% | ||
| 2009/10 | 10% | 32.5% | – |
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