Dividend allowances reduced to £2,000

In 2017/18 the first £5,000 of dividends were chargeable to tax at 0% (the Dividend Allowance). From 6 April 2018 the Dividend Allowance is reduced to £2,000. Dividends received above the allowance are taxed at the following rates:

• 7.5% for basic rate taxpayers

• 32.5% for higher rate taxpayers

• 38.1% for additional rate taxpayers.