Budget 2015 brought in a £5,000 tax free dividend allowance with effect from 6 April 2016.
In an attempt to reduce the estimated loss to the Exchequer of £6 billion as a result of business incorporations, the tax free allowance will be cut to £2,000, just two years after its introduction, commencing 6 April 2018. Most affected will be owner managed businesses, where higher rate taxpayers can anticipate an increase in personal tax of £975 per annum.