UK dividend tax rates and the dividend allowance for 2025/26 and 2026/27
For 2026/27 the dividend tax rates are 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate), charged only on dividends above the £500 dividend allowance; GOV.UK says no tax is due on dividend income within your Personal Allowance or on dividends from shares in an ISA. For 2025/26 the rates were 8.75%, 33.75% and 39.35%, with the same £500 allowance. The tax year begins on 6 April; see UK tax year dates for the Self Assessment deadlines.
Dividend tax rates and allowance by tax year
| Band | 2025/26 | 2026/27 | 2027/28 (Budget 2026 Annex A) |
|---|---|---|---|
| Basic rate (ordinary rate) | 8.75% | 10.75% | 10.75% |
| Higher rate (upper rate) | 33.75% | 35.75% | 35.75% |
| Additional rate | 39.35% | 39.35% | 39.35% |
| Dividend allowance | £500 | £500 | £500 |
Status: 2025/26, past tax year. Rates and allowance as the HMRC Income Tax rates and allowances table (updated 6 April 2026) shows them.
Status: 2026/27, rates GOV.UK shows for 6 April 2026 to 5 April 2027, as the Tax on dividends page showed when we checked on 5 November 2026.
Status: 2027/28, listed in Annex A of the Budget 2026 overview of tax legislation and rates, a policy paper published on 28 October 2026; not confirmed here as law. HMRC's Budget 2026 collection says the Chancellor delivered Budget 2026 to Parliament on 28 October 2026.
The allowance applies per tax year. Rates apply to dividend income above it, and no rate applies to dividend income within your Personal Allowance:
“You do not pay tax on any dividend income that falls within your Personal Allowance (the amount of income you can earn each year without paying tax). You also get a dividend allowance of £500 each year. You only pay tax on any dividend income above the dividend allowance.”
The change from 6 April 2026
HMRC published a technical note with Budget 2025 on 26 November 2025. It says, for dividend income:
“Income Tax for dividend income will now be 10.75% at the ordinary rate and 35.75% at the upper rate from 2026 to 2027. The dividend additional rate and dividend trust rate will both remain unchanged at 39.35%”
“the dividend allowance will remain unchanged”
The 2025/26 and 2026/27 figures in the table above agree with that note: 8.75% plus 2 percentage points is 10.75%, and 33.75% plus 2 is 35.75%.
Basic, higher and additional bands
GOV.UK's Tax on dividends page gives the rates by band and says how a band is found:
“How much tax you pay on dividends above the dividend allowance depends on your Income Tax band. This table shows the rates from 6 April 2026 to 5 April 2027. You can also see rates and allowances for past tax years. Tax band Tax rate on dividends over the allowance Basic rate 10.75% Higher rate 35.75% Additional rate 39.35% To work out your tax band, add your total dividend income to your other income. You may pay tax at more than one rate.”
The band limits come from GOV.UK's Income Tax rates page, which also carries the Scotland exception and the Personal Allowance reduction:
“The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,570. Income tax bands are different if you live in Scotland. Band Taxable income Tax rate Personal Allowance Up to £12,570 0% Basic rate £12,571 to £50,270 20% Higher rate £50,271 to £125,140 40% Additional rate over £125,140 45%”
The Scotland sentence in that quote is about Income Tax bands on other income. For dividends, GOV.UK says people in Scotland pay the same tax as the rest of the UK (quoted in the Scotland section below).
“Your personal allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £125,140 or above.”
HMRC's rates table prints the same bands as income after allowances, for 2025/26 and 2026/27 alike, as printed: basic rate up to £37,700, higher rate £37,701 to £125,140 and additional rate over £125,141. The two documents state the limits in different ways, so both are shown; neither is adjusted here.
Scotland
“Scottish Income Tax applies to your wages, pension and most other taxable income. You’ll pay the same tax as the rest of the UK on dividends and savings interest.”
The Budget 2025 technical note adds, in its section on devolved taxes:
“the changes to savings and dividend rates will apply UK-wide”
ISAs and pensions
GOV.UK on ISAs:
“You do not pay tax on dividends from shares in an ISA.”
For a registered pension scheme the rule is statutory, in section 186 of the Finance Act 2004, with two exceptions that sit next to it:
“(1)No liability to income tax arises in respect of— (a)income derived from investments or deposits held for the purposes of a registered pension scheme, or […]”
“(2)The exemption provided by subsection (1) does not apply to income derived from investments or deposits held as a member of a property investment LLP; and for this purpose “income” includes relevant stock lending fees, in relation to any investments, to which subsection (1) would apply by virtue of section 129B of ICTA (inclusion of relevant stock lending fees in income).”
“(2A)The exemption provided by subsection (1) does not prevent the income from being charged to tax by virtue of section 185A.”
GOV.UK adds that tax is paid on money taken out:
“You pay tax when you take money out of a pension.”
Worked example
GOV.UK prints this example on its Tax on dividends page:
“You get £3,000 in dividends and earn £29,570 in wages in the 2026 to 2027 tax year. This gives you a total income of £32,570. You have a Personal Allowance of £12,570. Take this off your total income to leave a taxable income of £20,000. This is in the basic rate tax band, so you would pay: 20% tax on £17,000 of wages no tax on £500 of dividends, because of the dividend allowance 10.75% tax on £2,500 of dividends”
Our arithmetic, not a figure printed by GOV.UK: 20% of £17,000 of wages is £3,400, and 10.75% of £2,500 of dividends is £268.75, so £3,668.75 in total before any other tax. This is the site's illustration of GOV.UK's figures and an estimate only.
GOV.UK's example does not work through a case where dividends straddle two bands; the page says only that you may pay tax at more than one rate, and it says what to do about reporting:
“If you have dividend payments over both your unused Personal Allowance and dividend allowance, you need to report these to HM Revenue and Customs (HMRC).”
Reporting is through Self Assessment: UK tax year dates has the deadlines. The State Pension age calculator and the UK section cover other UK topics.
Frequently asked questions
What are the UK dividend tax rates for 2026/27?
GOV.UK Tax on dividends shows 10.75% for the basic rate, 35.75% for the higher rate and 39.35% for the additional rate on dividends above the £500 dividend allowance, for 6 April 2026 to 5 April 2027. GOV.UK also says no tax is due on dividend income within your Personal Allowance and that you do not pay tax on dividends from shares in an ISA, that the rate depends on your Income Tax band, and that you may pay tax at more than one rate.
What were the dividend tax rates for 2025/26?
The HMRC Income Tax rates and allowances table (updated 6 April 2026) shows 8.75% basic, 33.75% higher and 39.35% additional for 2025/26, with a £500 dividend allowance. HMRC Budget 2025 documents, published on 26 November 2025, announced rises of 2 percentage points at the ordinary and upper rates from 2026 to 2027, with the additional rate and the dividend allowance unchanged.
Do the dividend rates change for 2027/28?
Annex A of the HMRC Budget 2026 overview of tax legislation and rates, a policy paper published on 28 October 2026, lists 10.75%, 35.75% and 39.35% and a £500 allowance for 2027/28, the same figures as 2026/27. That is a Budget document, and its legal status is not confirmed by this site; GOV.UK Tax on dividends is the source for the rates in force.
Is the dividend allowance £500?
GOV.UK says you get a dividend allowance of £500 each year and only pay tax on dividend income above it. The HMRC table shows £500 for 2024/25, 2025/26 and 2026/27, and £1,000 for 2023/24. Dividends within your Personal Allowance are not taxed either, and GOV.UK says dividend payments over both your unused Personal Allowance and the dividend allowance must be reported to HMRC.
Does Scotland have different dividend tax rates?
No. GOV.UK Scottish Income Tax says Scottish Income Tax applies to wages, pension and most other taxable income, and that people in Scotland pay the same tax as the rest of the UK on dividends and savings interest. The HMRC Budget 2025 technical note says the changes to dividend rates apply UK-wide.
Are dividends in an ISA or a pension taxed?
GOV.UK says you do not pay tax on dividends from shares in an ISA. For a registered pension scheme, section 186 of the Finance Act 2004 says no liability to income tax arises on income from investments held for its purposes, except that the exemption does not apply to income from investments held as a member of a property investment LLP and does not prevent a charge under section 185A. GOV.UK also says you pay tax when you take money out of a pension.
Is there a worked example of dividend tax?
GOV.UK Tax on dividends prints one: £3,000 in dividends and £29,570 in wages in 2026/27 give a total income of £32,570 and, after the £12,570 Personal Allowance, a taxable income of £20,000 in the basic rate band. The tax is 20% on £17,000 of wages, none on £500 of dividends because of the dividend allowance, and 10.75% on £2,500 of dividends, which is £268.75 by our arithmetic. GOV.UK does not work through a case where dividends straddle two bands.
More UK pages
Sources
- GOV.UK: Tax on dividends
- HMRC: Income Tax rates and allowances for current and previous tax years (updated 6 April 2026)
- GOV.UK: Income Tax rates and Personal Allowances
- GOV.UK: Scottish Income Tax
- HMRC: Budget 2025, Changes to tax rates for property, savings and dividend income (26 November 2025)
- HMRC: Budget 2025, Change to tax rates for property, savings and dividend income, technical note (26 November 2025)
- HMRC: Budget 2026 overview of tax legislation and rates, Annex A: rates and allowances (28 October 2026)
- HMRC: Budget 2026 tax related documents
- legislation.gov.uk: Finance Act 2004, section 186
- GOV.UK: Tax on your private pension contributions
- GOV.UK: Individual Savings Accounts (ISAs)
All sources were fetched directly from the publishers on 5 November 2026. Reviewed 5 November 2026. FedRateCalc is not affiliated with GOV.UK, HM Revenue and Customs, the Department for Work and Pensions or the UK Government; their pages are the official sources, and anything they publish after that date overrides this site. Nothing here is tax, legal or financial advice.