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Dividend tax in United Kingdom 2026
Dividends have their own schedule: after a £500 tax-free amount, you pay 10.75% in the basic band, 35.75% in the higher band and 39.35% at the top — rates that just rose 2 points in April 2026.
No National Insurance applies to dividends, which is why the salary-plus-dividends mix remains the standard structure for company owner-directors.
At a glance
- top rate
- 39.35% (additional rate)
- entry band
- First £500 tax-free, then 10.75% in the basic band
- tax year basis
- 6 April – 5 April
- filing deadline
- 31 January via self-assessment
- residency basis
- Residents: worldwide dividends (the foreign income and gains (FIG) regime excepted)
- regime flag
- Dividends inside an Individual Savings Account (ISA): always 0%
Rates
Dividend tax 2026/27
| Which band the dividends fall in | Rate | Note |
|---|---|---|
| Basic rate band | 10.75% | Was 8.75% in 2025/26 |
| Higher rate band | 35.75% | Was 33.75% in 2025/26 |
| Additional rate (over £125,140) | 39.35% | Unchanged |
Thresholds & allowances
- Dividend nil rate£500
Tax-free, but still counts when working out your band
Residency
Residency trigger
Dividends stack on top of your other income to find their band.
Non-resident treatment
The UK charges no withholding tax on dividends paid to non-residents; from April 2026 the old notional credit for non-residents is abolished.
Notes
- Dividends are the top slice of income — a modest salary can push them into the 35.75% band.
- Dividends held inside Individual Savings Accounts (ISAs) or pensions stay entirely tax-free.
- Dividend income above £10,000 requires a self-assessment return; smaller amounts can be handled through your tax code.
FAQ
What is the UK dividend tax rate in 2026/27?
10.75% in the basic band, 35.75% in the higher band and 39.35% above £125,140 — after a £500 tax-free amount. Both lower rates rose 2 points in April 2026.
Do non-residents pay UK tax on dividends?
The UK withholds nothing on dividends paid abroad — 0% at source, with any tax depending on the recipient's own country.
Figures: tax year 2026/27, compiled from public sources. Not tax advice.