Lee Sharpe looks at the tax-efficient extraction of profits from a family company in the 2023/24 tax year.
Long-term Tax Insider readers will recall that in 2015 the Chancellor of the Exchequer explained it was necessary to ‘reform’ (i.e., increase) dividend taxation, so corporation tax rates could be lowered to 19% and beyond, while balancing the Treasury’s books, thus making the UK internationally competitive.
Since that ‘reform’ was introduced, the so-called dividend ‘allowance’ (that is actually an initial zero rate for dividend income and not an allowance) has been:
- reduced to £2,000 from its original £5,000 in the 2017 Spring Budget;
- reduced to £1,000 from April 2023; and
-
will be further reduced to just £500 from April 2024.
The last two adjustments were
