Dividend Tax Credits

[Ian]

Hi,

Does anyone know if there will be any changes to dividend tax credits in 2004?

Thanks
Ian

[AtW]

yeah there will be some kind of extra tax on dividends in owner-manager companies - aka IR591, details are unknown but it will certainly make things worse off

[Ian]

Understand the debate around IR591 but that seems to focus on National Insurance on Dividends.

But, I recall reading that the 10% tax Credits when introduced were to be withdrawn in 2004. Or does that only apply to ISAs?

No tax credits + NI on dividends would not be nice!

Ian

[silicondale]

The truth is that nobody knows what 'IR591' will contain. At the time of the PBR probably not even the Treasury itself knew - it was just a statement of intent.

The only certain change in 2004 concerning dividend tax credits is that they are to be withdrawn for dividends paid within ISAs.

It seems to me unlikely that from no details being forthcoming at all, there will suddenly be a raft of legislation imposed in the budget and effective immediately. That wasn't even how they did IR35, and whatever form IR591 takes, I think it's likely to be bigger and more wide-ranging than IR35.

[R Soles]

Dividend Tax Credits

IIRC, the tax credit is not being abolished.

From the 6th April 2004, you will be unable to reclaim the tax credit on dividends held in PEPs and ISAs.

RS