The New Dividend Rules will take effect from 6 April 2016

The first £5,000 of dividends will not be taxed

Any amounts exceeding this will see an increase in tax of 7.5% compared with the previous tax year

It is therefore very important to consider some of the following tax planning opportunities:

• For example, have you equalised your shareholding between your self and your partner so that you both can enjoy the first £5,000 tax free dividends

• Is there the opportunity for the company to pay interest on any money you have lent to  the company for business purposes. If so, you may be able to use the personal savings allowance to receive this interest tax free.

• There may be the opportunity (depending on your personal circumstances) to reduce the amount of dividends you take out of the company and use this to pay into a company pension scheme which could attract 20% tax relief. By adopting this approach you may have the opportunity to save a substantial amount of tax.

It is very important that your review all the possibilities that are open to you and I would be delighted to hear from you if you have any questions regarding the above. Please feel free to email me at: kevin@kwaccounting.com