Definition of dividend tax allowance

The UK’s dividend tax allowance was introduced from 1 April 2016, and is an amount of dividends which would otherwise be subject to income tax and which will attract tax at 0%. In other words, it is effectively an exemption from tax for an amount up to a specified level of UK dividend income. It replaced the dividend tax credit, and is available to any taxpayer with dividend income, irrespective of the amount of non-dividend income received. [1]

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