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  • Michael Roberts

Reduction in Dividend Allowance "scrapped"

In the last Budget in March, it was announced that the Dividend Allowance of £5,000 would be reduced to £2,000 per year per person with effect from April 2018.

The Dividend Allowance allows an individual to receive an amount of dividends without paying tax, regardless of their other income.

Following the surprise announcement of a General Election to be held in June, certain pieces of legislation that were included in the Finance Bill have been dropped; and this is one of them.


This is good news for individuals who receive a large amount of dividends each year; particularly business owners who typically draw a low salary plus dividends.

However, we know the government need to raise more tax to balance the books, and with the first of the new Autumn budgets just a few months away, it remains to be seen whether this measure will be reintroduced.

Important Note

This article is intended for information purposes only and should not be considered to be a recommendation. This article is based on our understanding of current and draft pension and tax rules as at the date of this article. Please note that tax and pension rules are subject to change; if you are at all uncertain about the suitability of any option for your circumstances we strongly suggest you seek regulated personal financial advice. You should not take action solely on the basis of this article without seeking advice specific to your circumstances. Please get in touch to find out more. · T: 01635 555650 · E:

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