July 2015 Budget – Rental Income or paid by dividends you need to read this

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Tbudget-case1he Chancellor’s 2015 Budget contained some Radical changes to Dividend and Rental Income – none of it good news!

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.