“Business owners should think strategically and plan for the long-term…”

by | Mar 13, 2017

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Cheshire-based financial planner Jonnie Whittle (a financial planner at Clarion Wealth Planning), believes that whilst the cuts to the tax free dividend allowance (as announced in the recent budget), appear problematic for many business owners, they can actually be mitigated if they think strategically and plan for the long-term.

He said: “The reduction in the tax free dividend allowance, from £5,000 to £2,000, will affect investors with portfolios of shares held outside ISAs or pensions, as well as company owners or directors who pay themselves in the form of dividends rather than a salary.

“On the face of it this is a blow to hard-working business owners and investors. However, it’s important to think long-term.


“For example, business owners can incorporate these additional taxes into their planning, weighing up if dividends remain the best option for them, and perhaps increasing contributions to pension schemes if appropriate. For investors, meanwhile, it may be possible to mitigate some or all of the effect of these changes by using different wrappers, equalising assets between spouses and maximising the use of other allowances.

“Overall, today’s Budget was a low-key affair and it is worth remembering that, while it may require some people to make minor adjustments, with proper planning it shouldn’t distract people from their bigger financial goals.”

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