Dividend Tax Calculator UK 2026
Calculate income tax on dividends received from UK shares, investment trusts and company shareholdings. The dividend allowance is £500 for 2026/27.
Dividend Tax Rates 2026/27
- Dividend allowance: £500 (0% on first £500)
- Basic rate (income up to £50,270): 8.75%
- Higher rate (£50,271–£125,140): 33.75%
- Additional rate (above £125,140): 39.35%
- Dividends in ISA or pension: completely tax-free
Calculate Your Dividend Tax Bill
Enter your total income and dividend amounts to see exactly how much tax you owe on dividends in 2026/27.
Dividend Tax Calculator 2026/27
2026/27 bands: basic rate to £50,270, higher rate £50,271–£125,140. Personal allowance tapered above £100,000. Not financial advice.
How Dividend Tax Works
Dividends are treated as the “top slice” of your income, sitting above employment income and most other income types. Your other income fills the tax bands first, and dividends are taxed at whichever rates remain. If your salary already fills the basic rate band, all dividends will be taxed at 33.75% — even if the dividend income itself is modest.
The £500 dividend allowance applies to everyone regardless of tax band. It was reduced from £2,000 to £1,000 in April 2023, and further to £500 in April 2024, where it remains for 2026/27. Dividends inside an ISA do not count towards this allowance.
Frequently Asked Questions
1. How much is dividend tax in the UK 2026?
Dividend tax rates for 2026/27 are: 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers, and 39.35% for additional rate taxpayers. The first £500 of dividend income is covered by the dividend allowance at 0%. Dividends sit on top of all other income, so if your salary fills the basic rate band, dividends will be taxed at higher rates.
2. What is the dividend allowance for 2026?
The dividend allowance is £500 for 2026/27. This means the first £500 of dividends each year is tax-free, regardless of your income tax band. The allowance was cut from £2,000 to £1,000 in 2023/24 and to £500 in 2024/25. Dividends inside an ISA or pension are completely free from tax and do not use this allowance.
3. Do I need to declare dividends on Self Assessment?
You must file Self Assessment if total dividend income exceeds £10,000 in a tax year, or if you have any dividend tax to pay (dividends above the £500 allowance). Limited company directors paying themselves via dividends almost always need to submit a Self Assessment return.
4. How are dividends taxed for limited company directors?
Directors who take dividends pay no National Insurance on dividend income. The first £500 is free via the dividend allowance. Above this: 8.75% (basic), 33.75% (higher), 39.35% (additional rate). Most directors take a salary up to the NI primary threshold (£12,570) and top up with dividends to make efficient use of the basic rate band.
5. Dividend tax vs income tax — how do they compare?
Dividend tax rates are lower than equivalent income tax rates because the paying company has already paid corporation tax on the profits. Basic rate: 8.75% dividend tax vs 20% income tax. Higher rate: 33.75% vs 40%. However, dividends do not count as earnings for NI or state pension purposes, which is a hidden long-term cost.