As far as I am concerned it's actually a tax on my savings, because interest rates were so low, I moved to shares, so I will be hit by this. Luckily I will move a bunch into my ISA this year and at the beginning of next year, to try to reduce the effects.

But to bring in a policy and scrap it within two years is stupid. How is anybody suppose to plan anything.

Assuming you are a higher rate payer you will not be much worse off anyway, due to the increase in the starting point for the high rate band (43k becomes 45k saving you tax at 32.5% on £2k of divs in 2017/18; a year later you lose the protection on £3k of divs when the allowance drops from £5k to £2k for 2018/19 (although at that point there will likely be another increase to the high rate threshold.

If you are only basic rate tax anyway your dividend tax is only increased by a max £225 because it's only 7.5% on what no longer fits in the reduced dividend allowance.

As usual there's an existing thread Reduction in Dividend Allowance?, started by the forum regulars before MSE created this one for their own article...


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