Following the Chancellor’s announcement of changes to the Dividend Tax Allowance, due in April 2018, new research by the Share Centre suggests that tens of thousands of people could see their income fall as a result of new restrictions on tax free dividends.
Philip Hammond announced in the Budget that the £5,000 tax-free allowance for dividend income would be restricted to just £2,000 from April 2018. According to the Share Centre estimates, 90,000 investors across Britain could be affected, as they would have sufficient funds outside ISAS to produce an income above the £2,000 limit.
Adding to this, the Sunday Telegraph notes that a £50,000 portfolio needs to generate only 4 per cent income to hit the £2,000 threshold.
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