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Increase in taxation of dividends

With the increase in taxation of dividends now being less than 2 months away, consideration should be given to ensuring that dividends are paid in the most tax efficient manner. The increased tax rate applies to dividends declared from 6 April 2016.

The tax on dividends is increasing by 7.5%, so that the effective rate of tax on dividends for basic rate tax payers increases from 0% to 7.5% and for higher rate taxpayers from 25% to 32.5%.

Generally it is sensible to declare additional dividends prior to 6 April 2015, however the optimum amount of additional dividends is dependent upon each recipients personal tax position. We would suggest that professional advice is taken before declaring any additional dividends. If you require assistance on this matter, please e mail Shacklefords  Chartered Accountants on This email address is being protected from spambots. You need JavaScript enabled to view it.

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Tony Shackleford
Tony Shackleford

Chartered Accountant offering support to Limited companies and the self employed.

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