UK Dividend Tax Rates 2026/27
The complete reference for UK dividend tax rates for the 2026/27 tax year: 8.75% basic, 33.75% higher, 39.35% additional. £500 dividend allowance. Personal Allowance £12,570. All thresholds, with worked examples.
Last updated for the 2026/27 tax year (6 April 2026 to 5 April 2027).
2026/27 dividend tax rates at a glance
| Band | Total income range | Dividend tax rate |
|---|---|---|
| Allowance | First £500 of dividends | 0% |
| Basic rate | Up to £50,270 total income | 8.75% |
| Higher rate | £50,271, £125,140 | 33.75% |
| Additional rate | Above £125,140 | 39.35% |
These rates apply to dividends received from 6 April 2026. The rates are unchanged from 2025/26. Personal Allowance: £12,570.
Why dividend tax rates are lower than income tax rates
Dividends are paid from company profits that have already been taxed at 19% or 25% corporation tax. The government treats this as a form of double taxation and sets dividend rates lower to partially offset it — hence 8.75% rather than 20%, and 33.75% rather than 40%.
But the rates are not simply income tax minus corporation tax. The effective combined rate — corporation tax plus dividend tax — is still significant, especially at higher and additional rate levels.
Tax year comparison: how rates have changed
| Tax year | Basic | Higher | Additional | Allowance |
|---|---|---|---|---|
| 2016/17, 2021/22 | 7.5% | 32.5% | 38.1% | £5,000 → £2,000 |
| 2022/23 | 8.75% | 33.75% | 39.35% | £2,000 |
| 2023/24 | 8.75% | 33.75% | 39.35% | £1,000 |
| 2024/25 | 8.75% | 33.75% | 39.35% | £500 |
| 2025/26 | 8.75% | 33.75% | 39.35% | £500 |
| 2026/27 (current) | 8.75% | 33.75% | 39.35% | £500 |