The dividend tax credit ( which reduces the amount of tax paid on income from shares ) shall be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from 6 April 2016.Tax rates on dividends will also be increased .

This new simpler system will mean that only those with significant dividend income will pay more tax.

Investors that have modest income from shares will either see a tax cut or no change in the amount of tax they owe.