UTILISING THE 2019/20 DIVIDEND ALLOWANCE

The dividend allowance is quite unusual in that it is available to everyone and everyone has the same allowance. For 2019/20 the allowance is set at £2,000. In common with many allowances, it is a case of use it or loses it.

As the end of the 2019/20 tax year draws closer, what can be done to ensure that the allowance is not wasted?

Nature of the allowance

Although termed the ‘dividend allowance’ its nature is really that of a nil rate band. Dividends which are sheltered by the allowance form part of band earnings, but the dividends that fall within that band are taxed at a zero rate.