- If you need income from your investments, as well as holding dividend and income-paying ones, you could sell chunks of growth investments
- This can be more tax-efficient, result in better performance and enable your portfolio to keep growing
- Taking income via this approach incurs many risks including depleting the capital value of your investments
Earlier this month, the government announced an increase in National Insurance and the dividend tax of 1.25 per cent to help fund social care. This does not apply to dividends from investments held within individual savings accounts (Isas), and the dividend allowance still enables you to receive dividends outside Isas worth up to £2,000 each year tax-free. However, tax on dividends outside tax wrappers above this allowance will increase.