Dividend – Budget 2024

Post-October 2024 Budget: Dividend – What Does It Mean for You?

Following the recent budget, there are notable changes to dividend tax rates and allowances. This article highlights the essential updates in dividend taxation, along with key tax-saving tips to help you make the most of these adjustments.

Dividend Tax Rates and Allowances – 

The dividend allowance remains at £500 per annum. Above this, dividends that fall into the basic rate band are taxed at only 8.75% compared to 33.75% if in the higher rate band or 39.1% if in the additional rate band. Here is a reminder of the relevant bands:

  • Basic rate band – £50,270
  • Higher rate band – £50,271 to £125,140
  • Additional rate band – above £125,140

 

Tax tip

  • Be sure to utilise the dividend allowance every tax year if possible. If your spouse or civil partner does not receive dividends consider transferring shares to them, particularly if they are a lower rate taxpayer.
  • Consider other income you have in the tax year and, if possible, only take dividends that bring your total income up to £50,270. This way you will benefit from the much lower tax rate on dividends.

 

Unlock the Full Potential of the Budget with Competex:

The budget has introduced some significant changes. At Competex, we break down the key changes and provide advice on how to use them to your advantage. Whether it’s for your personal taxes or business planning, we’re here to help you navigate the complexities.

For further information, please contact us at info@competex.co.uk or visit our website at https://www.competex.co.uk.

 

Explore Related Insights

To better understand the recent budget changes and their potential impact on your business, we recommend exploring the following articles:

 

Author: Kavit Sethi
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