The Ultimate Need-to-Know Guide to Dividend Tax Rules

• Dividends received by pensions and ISA’s are unaffected. • Dividend income is treated as the top band of income. • From April 2017, the notional 10% tax credits on dividends is abolished. • The tax-free dividend allowance will be £2000 from 2018/19. Dividends above this level are taxed at 7.5% (basic rate), 32/5% (higher rate) and 38.1% (additional rate). This mostly affects those who work in very small family businesses, in particular couples who split incomes. • Individuals who are basic rate payers who receive dividends of a larger amount than £5001 must now complete self-assessment returns. • The
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