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Dividend Tax Calculator

Work out your 2026/27 tax on dividend income after the £500 dividend allowance — with the new higher rates from April 2026.

Inputs

GBP
GBP
2026/27 dividend tax rates (new from April 2026): Basic rate 10.75% · Higher rate 35.75% · Additional rate 39.35%. Dividend allowance £500 (nil-rate band). Dividends are stacked on top of other income. Rates inside an ISA or pension: 0%. These are England/Wales/NI rates.

Tax on Dividends

Dividend tax payable
£0

How dividend tax works in 2026/27

Dividends received outside an ISA or pension are taxed after a £500 nil-rate allowance. The rate depends on which income tax band the dividends fall into — HMRC "stacks" dividends on top of all other income, so your salary and pension income determine which band applies to your dividends.

From 6 April 2026, the basic-rate dividend tax rose from 8.75% to 10.75%, and the higher-rate from 33.75% to 35.75%. The additional rate remains at 39.35%. These 2 percentage-point increases affect most investors and company directors who pay themselves via dividends.

Dividends held inside an ISA or pension are completely tax-free and don't count toward the £500 allowance. Moving dividend-paying shares into an ISA (a "Bed and ISA") is a common strategy to shelter future income.

FAQ

Why did dividend tax rates increase in 2026/27?
The 2% increase at basic and higher rates was announced at Autumn Budget 2025. The change narrows the gap between dividend and employment income tax rates. The additional rate (39.35%) is unchanged.
What is the dividend allowance?
The first £500 of dividend income each year is tax-free (the nil-rate band). This applies to everyone, regardless of their tax band. It was reduced from £2,000 in 2022/23 to £1,000 in 2023/24 and £500 from 2024/25.
Should I move shares into an ISA?
If you hold dividend-paying shares outside an ISA and receive more than £500 in dividends, moving them into an ISA shields all future dividends from tax. You can use up to £20,000 of ISA allowance per year. The CGT exemption (£3,000) can help offset any gain on the disposal.
How do I report dividend income?
If your dividends exceed £500 and you're not already filing a Self Assessment return, you must register for Self Assessment. Alternatively, HMRC may adjust your tax code to collect the liability through PAYE if the amount is under £10,000.