Conservatives plan to restore dividend tax credit

The Conservatives will reverse the effects of Labours abolition of dividend tax credit for pension funds.

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Following George Osborne’s speech on the economy earlier today, the Party has published details of its plans to improve Britain’s savings record.

The document, “A New Economic Model: Eight benchmarks for Britain”, revealed the Conservatives plan to reverse the effects of Gordon Brown’s abolition of dividend tax credit on pension funds.

Many have blamed Labour for failing pension savers when it removed the tax credit, which allowed tax-exempt shareholders such as pension funds to receive a boost to income through gross dividends.

Osborne says the plans would not be introduced immediately, but form part of the Conservative Party’s long-term strategy.

The document also committed to continuing plans for auto-enrolment into pension schemes, saying it will work with employers and industry to ensure those on middle and lower incomes can save for retirement.

It says it will also deal with one of the biggest obstacles to saving for low income households, the means-testing of benefits, by restoring a link between earnings and state pension.

Source: www.ifaonline.co.uk

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