14 March 2018 - From 6 April 2018, the Dividend Allowance will drop from £5,000 to £2,000.
This will affect funds and shares that pay dividends that are held outside of an ISA or a pension.
Any dividend income received above the new £2,000 a year threshold will be taxed as follows:
7.5% if you are a basic-rate tax payer
32.5% if you are higher-rate tax payer
38.1% if you are additional-rate tax payer
This means that ISAs will be become even more valuable and, arguably, the best way for investors to mitigate the dividend allowance cut.
Another (smaller) change from 6 April 2018 is that, upon death, dividends will remain tax-free during the estate administration process.
At the moment dividends are taxable on the estate during this period - even during the Inheritable ISA allowance process.
If you have any questions, please contact our client service team on 020 7384 7300.