Government Drop Cut to Dividend Allowance
26th April 2017
The Government has dropped plans to more than half the Dividend tax-free allowance. Last month IFB had warned that the decision to cut the dividend allowance would disproportionately impact family businesses and risk investment in future growth, and called on the Government to reverse the change announced in the Budget.
IFB Executive Director Elizabeth Bagger previously said: “At a time when business is looking for stability and confidence to invest, this decision sends a worrying message to those running family firms.
“This measure disincentives’ taking a risk and starting a business, because the modest financial rewards are being reduced whilst the significant risks remain unchanged. This undermines the Government’s own ambition to make the UK the best place in the world to start and grow a business.
“Owners of family businesses won’t be able to take advantage of the increased ISA limit to offset this change. Shares, particularly minority stakes, in family businesses are illiquid assets. For small businesses in particular, their family business is their investment for their future, and that of their family.”
The IFB will keep monitoring this issue. Fur further information please contact IFB's Communications Director Fiona Graham at fiona.graham.ifb.org.uk.