Tax on dividends
Discussion
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.....
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.
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.
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