About 90,000 investors are set to lose out as a result of Hammond's changes to the dividend tax allowance outlined in the Budget, many of whom are pensioners, according to data from The Share Centre.
The retail stockbroker said the changes will typically affect investors with portfolios valued at more than £50,000 (assuming a 4% yield, a portfolio size of £50,000 would generate dividend income of £2,000). It added an "unintended consequence" of the change could be that it penalises those using dividends to fund their retirement. In the 2017 spring Budget, Chancellor Philip Hammond cut the dividend tax allowance from £5,000 to £2,000 with the reduction set to take effect from April 2018. The government said the move - alongside the now scrapped proposals to increase Class 4 Nati...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes