The table below compares the current rates of tax on Dividend income with the new ones announced.
|20pc taxpayers||40pc taxpayers||45pc taxpayers|
|Effective dividend tax rate now||0pc||25pc||30.56pc|
|Rate after April 2016 (after £5,000 allowance)||7.5pc||32.5pc||38.1pc|
Source: KPMG, HM Treasury
Today’s announcement clearly represents a significant tax increase for people with high incomes as well as those on low ones.
If you take a dividend of £20,000 a year as your total “Salary” you will now pay tax of £1,125 instead of £nil under the old rules.
If you have Rental properties and are a higher rate tax payer your tax relief on your mortgage has effectively been halved! Hardly fair for such a long term investment.
Click here to download a PDF which contains the latest tax and financial information, which we trust you will find useful. For more information on how the changes may affect you, please contact us.SHARE: