CHANGES TO TAXATION OF DIVIDENDS

The Chancellor has announced that from 6 April 2016 there will no longer be a notional tax credit associated with dividends received and the following rates will apply after a £5,000 tax free dividend allowance:

  • Basic rate taxpayers         - 7 ½%
  • Higher rate taxpayers        - 32 ½%
  • Additional rate taxpayers  - 38.1%

This will mean that from 2016/17 individuals will be able to receive up to £17,000 tax free:

  • Personal allowance          £11,000
  • Tax free interest                £1,000
  • Tax free dividends             £5,000
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