Changes to the tax on dividends from 6th April 2016 – are you aware?

In the latest Budget the Chancellor changed the way that dividends are being taxed from the start of the new tax year 6 April 2016.

Presently and Dividends paid, that form part of the income between the tax free allowance and the 40% tax threshold within a tax year, attract no additional personal tax [corporation tax having been paid by the company at 20%].

From April 6th this changes. The tax on dividends between the tax allowance and the 40% tax band becomes 7.5% [However the first £5000 of dividends paid in a year are tax free].

This emphasises that from 6th April 2016 it becomes even more important to plan how and when to take your remuneration and to take advice about this. Indeed there is no time like the present to be reviewing this year and next year’s income streams.

At Winchester Bourne we work with our clients to help them achieve the most tax efficient ways to plan the remuneration. For more information please call 02380 693366 or email Sarah.