Sarah Bradford explains the impact of the changes in the dividend tax rate on the extraction of profits from a personal or family company.
Once upon a time, it was very beneficial to operate a business through a personal or family company and, once the personal allowance had been used up, to extract further profits as dividends.
The story so far…
Before 6 April 2016, dividends came with an associated tax credit of 10%, and there was no further tax to pay on dividends unless the grossed-up dividends fell
