Impact of new dividend rules

 Dividend rules to affect 700,000

About 700,000 taxpayers are set to face tax rises as a result of George Osborne’s reform of dividend taxation, claims the Institute for Fiscal Studies. It said the overhaul, which is expected to raise £2.5bn next year, will push up the tax bills of top-rate taxpayers receiving more than £25,250 in dividends a year, The Treasury says the changes — a 7.5 percentage point rate rise offset by the introduction of a new £5,000 allowance — will leave 85% of those who receive dividends unaffected or better off. It will increase the bills of a 40p taxpayer who receives more than £21,667 of dividends a year and a basic rate taxpayer receiving more than £5,000 of dividends, according to the IFS say Harris & Co.