Hi,
Need some advice and help. Currently in a dispute with someone over tax and pensions. We have had tax credits abolished for dividend payments, I think this is
No. Dividend income has fallen by 20%. The original sum invested and the capital growth are not affected by this.
If the dividend yield was previously 4%, you would need an extra 1% growth year on year to replace what Gordon has taken from you.
It was 20%, reduced to 10% by Gordon Brown in April 1999, and then the ability to reclaim tax credit on dividends was abolished this April.
It means that the pension fund needs 25% more than it would have got from the original net income to restore the tax reclaim income lost. 100 is 125% of 80.
Note that the tax deducted from interest is still 20% and can be reclaimed. As the Government needs to issue considerable billions each year in gilt-edged stock, you could call this cynical. I couldn't possibly comment.
Have something to add? Share your thoughts — no account required.
Ask the community — no account required