There is currently a £2,000, a year, 0% tax band for dividend income. Above this 0% tax band dividends are taxed at:
7.5% for basic rate taxpayers
32.5% for higher rate taxpayers
38.1% for additional rate taxpayers.
Shareholding directors who draw remuneration from their company in the form of dividends will need to base any tax planning on the above dividend allowance and tax rates and consider declaring an interim before 5th April tax year end.
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