Tax on dividends

Author
Discussion

Beggarall

Original Poster:

550 posts

241 months

Friday 24th November 2017
quotequote all
Does anybody know if the proposed reduction of the tax-free band on dividends will be reduced next year as threatened in the financial statement earlier in the year? It was proposed that the nil-rate band would be lowered from £5k to £2k but I don't think it got passed into law because the Finance Bill was abbreviated before the election and I didn't see anything about it in this week's budget. Or maybe I'm missing something? Trying to do some financial planning.....

PurpleMoonlight

22,362 posts

157 months

Friday 24th November 2017
quotequote all
The reduction was not in the Budget I believe, so no it remains at £5000.

Sheepshanks

32,752 posts

119 months

Friday 24th November 2017
quotequote all
It's already in the Finance (No 2) Bill 2016/17 which is in progress at the moment so it didn't need to be in this years budget.

PurpleMoonlight

22,362 posts

157 months

Friday 24th November 2017
quotequote all
Sheepshanks said:
It's already in the Finance (No 2) Bill 2016/17 which is in progress at the moment so it didn't need to be in this years budget.
Oh bummer.

Eric Mc

122,010 posts

265 months

Friday 24th November 2017
quotequote all
You may not have realised that we have had THREE Budgets this year -

The Finance Act 2017 (Spring Budget 2017)
The Finance Ac t No.2 2017 (Received Royal Assent on 16 November 2017)
The Finance Act 2018 (Autumn Budget 2017)

In the March 2017 Budget it was proposed that the Dividend Allowance of £5,000 be reduced from £5,000 to £2,000 with effect from 6 April 2018 (i.e. tax year 2018/19)

Due to time pressures created by the surprise announcement of the General Election, 80% of the Spring Budget proposals were binned in order that a much reduced Finance Bill could be passed in advance of the break up of Parliament. It was envisaged that most, if not all, of the 80% removed from this smaller bill would be re-introduced when Parliament reconvened after the election.


This was done (eventually) in November with the passing of the 2017 Finance Act (No.2).

And guess what, the £2,000 dividend allowance WAS included.

So, with effect from 6 Aprtil 2018, only £2,000 opf dividends will be tax free.

It wasn't mentioned in the Budget of 22 November because it had already been passed in the Budget of November 16th.


PurpleMoonlight

22,362 posts

157 months

Friday 24th November 2017
quotequote all
I was hoping, nay praying, that they had abandoned it. I hate the dividend tax with a passion.

I see the lower money purchase annual allowance has been brought in too.

Jockman

17,917 posts

160 months

Friday 24th November 2017
quotequote all
PurpleMoonlight said:
The reduction was not in the Budget I believe, so no it remains at £5000.
It got reduced to £2k.

PurpleMoonlight

22,362 posts

157 months

Friday 24th November 2017
quotequote all
Jockman said:
It got reduced to £2k.
I know, it's ruined my day.

cry

xeny

4,308 posts

78 months

Monday 27th November 2017
quotequote all
No - both capital gains and dividends are tax free in an ISA.

FredClogs

14,041 posts

161 months

Monday 27th November 2017
quotequote all
xeny said:
No - both capital gains and dividends are tax free in an ISA.
Cam you hold ltd company shares in an ISA?

PurpleMoonlight

22,362 posts

157 months

Monday 27th November 2017
quotequote all
FredClogs said:
Cam you hold ltd company shares in an ISA?
No.

OctyScout

3,925 posts

269 months

Monday 27th November 2017
quotequote all
you can hold listed shares in an ISA though!