UK Dividend Tax Calculator

See how much tax you owe on dividend income for 2026/27 — after the £500 dividend allowance — based on your tax band.

Your dividends

Total dividend income

All dividends from shares outside an ISA or pension in the tax year.

Other taxable income

Salary, pension and other taxable income — decides which dividend tax rate applies.

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Tax on your dividends

£—

Tax-free (dividend allowance)£—

Taxed at 10.75%£—

Taxed at 35.75%£—

Taxed at 39.35%£—

Dividends in an ISA or pension are not taxed — this calculator covers only taxable dividend income.

Rates for 2026/27: GOV.UK — Income Tax rates and allowances (10.75% / 35.75% / 39.35%, £500 allowance).

How it works

Every taxpayer gets a £500 dividend allowance — the first £500 of dividend income is tax-free. Anything above that is taxed at the rate for your tax band, based on your total taxable income. The rates for 2026/27 rose: 10.75% for basic-rate taxpayers, 35.75% for higher-rate and 39.35% for additional-rate.

Example calculation

You receive £10,000 of dividends, with other taxable income of £30,000:

Dividend allowance: first £500 tax-free
Taxable dividends: £9,500
Your £30,000 income leaves £7,700 of basic-rate band → £7,700 × 10.75% = £827.75
Remaining £1,800 × 35.75% = £643.50
Total dividend tax: ≈ £1,471

Example is illustrative for the 2026/27 tax year.

Methodology & formula

Tax-free amount = min(dividend income, £500 allowance).
Taxable dividends = dividend income − tax-free amount.
Basic-rate portion = min(taxable dividends, max(0, £37,700 − other income)).
Higher-rate portion = min(remainder, max(0, £125,140 − other income) − basic portion).
Tax = basic × 10.75% + higher × 35.75% + additional × 39.35%.

Assumptions: you are an individual UK resident, and your other taxable income determines the band. Scotland sets its own income tax bands — dividend rates themselves are UK-wide.

UK-specific information

Dividend allowance: £500 for 2026/27 (down from £1,000 in 2023/24). GOV.UK · 2026/27
Rates rose in 2026/27: basic 10.75% (up from 8.75%), higher 35.75% (up from 33.75%), additional 39.35% (unchanged). GOV.UK · 2026/27
ISA shield: dividends inside an ISA or pension are tax-free — a reason UK investors often hold shares in an ISA.
Company dividends: dividends from your own limited company are also covered by these rates and the £500 allowance.

Frequently asked questions

What is the dividend allowance?

The amount of dividend income you can receive tax-free each year — £500 for 2026/27. It is not a deduction you claim; it is applied automatically.

Why did dividend tax rates go up?

The Autumn Budget 2025 raised the basic-rate dividend tax from 8.75% to 10.75% and the higher rate from 33.75% to 35.75% for 2026/27. The additional rate stayed at 39.35%.

Do I pay tax on dividends in an ISA?

No. Dividends and gains inside an ISA are completely tax-free, which is why ISAs are popular for dividend-paying shares.

How do dividends affect my Income Tax?

Dividend income is added to your other income to decide your tax band, but it is taxed at dividend rates rather than normal Income Tax rates. Your Personal Allowance can also be used against dividend income.

Are dividends taxed differently in Scotland?

Dividend tax rates are the same across the UK. However, your tax band for dividends is based on your total income, which in Scotland follows Scottish Income Tax bands.

Do I need to report dividends?

If your dividends exceed the allowance, they usually need to be reported through self assessment. Dividends in ISAs never need reporting.

Related calculators

Capital Gains Tax Calculator · UK Income Tax Calculator · Salary Calculator · ISA Calculator · Home

Sources

GOV.UK — Income Tax rates and allowances (current and past): gov.uk (2026/27)

Casvia provides educational calculators and general information. It does not provide personal financial, tax or investment advice. Rules and thresholds can change — always check the latest official guidance.