How much tax do I pay on dividends?

For people who receive dividend income.

Applies to: England, Scotland, Wales, Northern Ireland Last checked against official sources: 30 September 2026

Official figures may have changed. Check the source.

You get a £500 dividend allowance, and dividends within your Personal Allowance are tax-free. Above that, from 6 April 2026:

Basic rate: 10.75%
Higher rate: 35.75%
Additional rate: 39.35%

Dividends from shares in an ISA are tax-free.

Key facts

£500 allowance
Basic rate 10.75%
ISA dividends tax-free

Dividend tax rates for 2026/27

A dividend is a payment a company makes to people who own its shares. Dividend tax rates went up on 6 April 2026 for basic and higher rate taxpayers.

Tax band	2025/26	2026/27
Dividend allowance	£500	£500
Basic rate	8.75%	10.75%
Higher rate	33.75%	35.75%
Additional rate	39.35%	39.35%

The rate you pay depends on which Income Tax band the dividends fall into.

How dividends are taxed

To work out your band, add your dividends to your other income, such as wages or pension. You may pay tax at more than one rate.

You pay no tax on:

dividends that fall within any unused Personal Allowance (£12,570 for most people)
the first £500 of dividends, thanks to the dividend allowance
dividends from shares held in an ISA

Worked example 1: basic rate (GOV.UK's example)

You earn £29,570 in wages and get £3,000 in dividends in 2026/27.

Total income: £32,570
Take off the £12,570 Personal Allowance: taxable income is £20,000, all in the basic rate band
20% tax on £17,000 of wages
No tax on £500 of dividends (dividend allowance)
10.75% on the other £2,500 of dividends = £268.75

In 2025/26 the same dividends would have cost £218.75 (at 8.75%). That is £50 more this year.

Worked example 2: higher rate

You earn £60,000 in wages and get £5,000 in dividends in 2026/27. Your wages already take you into the higher rate band, so all your dividends are taxed at the higher rate.

First £500: no tax
Remaining £4,500 x 35.75% = £1,608.75

How to tell HMRC and pay

Dividends in the tax year	What to do
Within your allowances	Nothing
Over your allowances, up to £10,000	Tell HMRC. Ask for your tax code to be changed, or contact the helpline. If you already file a tax return, put them on it
Over £10,000	You must send a Self Assessment tax return

If you do not usually file a return, let HMRC know after 5 April and before 5 October. For dividends paid in 2025/26, that is by 5 October 2026.

If you live in Scotland, Wales or Northern Ireland

Dividend tax rates are the same across the UK. Scotland sets its own Income Tax rates on wages and pensions, but people in Scotland pay the same tax as the rest of the UK on dividends and savings interest.

Related guides

Where these figures come from

Get it done

This takes you to the official service, which is free to use.

How to report dividends

Common questions

What is the dividend allowance for 2026/27?

You get a £500 dividend allowance each year, and you only pay tax on dividend income above it.

Do dividends count towards my tax band?

Yes. To work out your tax band, add your dividends to your other income, so you may pay tax at more than one rate.

Do I need to tell HMRC about dividend income?

If your dividends are over your allowances but no more than £10,000, tell HMRC between 5 April and 5 October, for example by asking for your tax code to be changed. Over £10,000, you must fill in a Self Assessment tax return.

Official sources

1.Tax on dividendswww.gov.uk/tax-on-dividends
2.How dividends are taxedwww.gov.uk/tax-on-dividends/how-dividends-are-taxed
3.How to report tax on dividendswww.gov.uk/tax-on-dividends/how-to-report-tax-on-dividends

Checked against GOV.UK on 30 September 2026

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