Reference

UK Dividend Tax Rates 2026/27

Reviewed by the UKDividendTaxCalculator team · Last reviewed 30 October 2026 · Checked against 2026/27 HMRC rates

The complete reference for UK dividend tax in 2026/27: 10.75% basic, 35.75% higher and 39.35% additional¹, with the £500 allowance and a £12,570 Personal Allowance². The rate you actually pay isn't set by the dividend size — it's set by where the dividends land once your salary has filled the bands. Here are all the numbers, the history, and a worked example.

Quick answer

UK dividend tax rates for 2026/27 are 10.75% (basic rate), 35.75% (higher rate) and 39.35% (additional rate)¹, up from 8.75% and 33.75% in 2025/26 (the additional rate is unchanged). The first £500 is covered by the dividend allowance and taxed at 0%. Which rate you pay depends on your total income — dividends stack on top of your salary — and dividends carry no National Insurance. Personal Allowance £12,570; basic-rate limit £50,270².

Band	2026/27	2025/26 (return due 31 January 2027)
Basic rate	10.75%	8.75%
Higher rate	35.75%	33.75%
Additional rate	39.35%	39.35%
Dividend allowance	£500	£500

Key figures

Dividends are taxed at 10.75% (basic), 35.75% (higher) and 39.35% (additional) for 2026/27 and 2027/28. Budget 2026 Annex A
The dividend allowance is £500 for 2026/27 and 2027/28. Budget 2026 Annex A
The Personal Allowance is £12,570, and it is reduced above £100,000 of adjusted net income. Budget 2026 Annex A
In 2025/26 the rates were 8.75%, 33.75% and 39.35%, with the same £500 allowance. HMRC rates, current and past

Checked 30 October 2026.

Key takeaways

2026/27 dividend rates: 10.75% / 35.75% / 39.35%¹ — basic and higher rates up 2 points from 2025/26 (8.75% / 33.75%).
The £500 allowance is taxed at 0%¹ but still uses up part of the band it sits in.
Dividends stack on top of salary², so your salary decides which rate each dividend pound meets.
Dividend rates sit below income-tax rates because company profit is taxed by Corporation Tax first⁴.
The allowance has fallen from £5,000 (2016/17) to £500 today³ — a big real-terms cut for unwrapped investors.
Budget 2026 (28 October 2026) left these rates and the £500 allowance unchanged for 2027/28 (Budget 2026 rates tables; what Budget 2026 changed for dividends).

Dividend tax rates 2026/27: tax on your dividends

2026/27 dividend tax, computed by our calculator. Dividends sit on top of the salary shown; the £500 allowance is included. Income Tax on the salary itself isn't.
Dividends	Salary £12,570	Salary £35,000	Salary £60,000
£1,000	£53.75	£53.75	£178.75
£2,000	£161.25	£161.25	£536.25
£5,000	£483.75	£483.75	£1,608.75
£10,000	£1,021.25	£1,021.25	£3,396.25
£20,000	£2,096.25	£3,278.75	£6,971.25
£30,000	£3,171.25	£6,853.75	£10,546.25
£50,000	£8,396.25	£14,003.75	£17,696.25

Other amounts: use the dividend tax calculator. For the 2025/26 return (8.75% and 33.75%), use the past-years calculator.

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	10.75%
Higher rate	£50,271, £125,140	35.75%
Additional rate	Above £125,140	39.35%

These rates apply to dividends received from 6 April 2026. The basic and higher rates rose by 2 percentage points from this date; the additional rate is unchanged. Personal Allowance: £12,570².

Worked example — dividends across two bands

A director takes a £12,570 salary (using the full Personal Allowance) and £40,000 of dividends. The dividends fill what's left of the basic-rate band, then spill into the higher rate. Watch the £500 allowance use up part of the basic band rather than adding to it:

Salary (covered by Personal Allowance)	£12,570
Dividends	£40,000
Dividend allowance (0%, uses £500 of the basic band)	£500
Basic-rate band left for dividends (£37,700 − £500)	£37,200
£37,200 taxed at 10.75%	£3,999.00
Remaining £2,300 taxed at 35.75% (higher rate)	£822.25
Total dividend tax	£4,821.25

Because the £500 allowance sits inside the basic band, only £37,200 — not £37,700 — is taxed at 10.75%, which pushes an extra £500 of dividends up into the 35.75% band. That single detail is what many quick estimates get wrong.

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 10.75% rather than 20%, and 35.75% 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 to 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)	10.75%	35.75%	39.35%	£500

Calculate tax at 2026/27 rates

Enter your salary and dividends to see the exact tax at 10.75%, 35.75% and 39.35%.

Open calculator

Dividend tax for past years Dividend allowance explained Higher-rate taxpayer guide Basic-rate taxpayer guide Additional-rate taxpayer guide

Sources & references

Every headline figure in this guide is drawn from the official HMRC and GOV.UK sources below and reflects the confirmed 2026/27 rates. Each link opens the relevant official page in a new tab.

Tax on dividends ↗ https://www.gov.uk/tax-on-dividends
Income Tax rates and Personal Allowances ↗ https://www.gov.uk/income-tax-rates
Changes to tax rates for property, savings and dividend income ↗ https://www.gov.uk/government/publications/changes-to-tax-rates-for-property-savings-dividend-income/changes-to-tax-rates-for-property-savings-dividend-income
Corporation Tax rates and reliefs ↗ https://www.gov.uk/corporation-tax-rates

Verified against published UK government guidance.

Frequently asked questions

What are the UK dividend tax rates for 2026/27?

10.75% basic rate (total income up to £50,270), 35.75% higher rate (£50,271 to £125,140), 39.35% additional rate (above £125,140). The £500 dividend allowance means the first £500 of dividends is free from dividend tax each year.

Have the dividend tax rates changed for 2026/27?

Yes. From 6 April 2026 the basic rate rose from 8.75% to 10.75% and the higher rate from 33.75% to 35.75%. The additional rate stays at 39.35%. The dividend allowance remains £500, as in 2024/25 and 2025/26.

What was the dividend tax rate before 2022?

Before April 2022, the rates were 7.5% basic, 32.5% higher and 38.1% additional. From April 2022 they rose to 8.75%, 33.75% and 39.35%, and that increase on dividends was kept even after the Health and Social Care Levy was reversed for income tax and National Insurance. From 6 April 2026 the basic and higher rates rose again, to 10.75% and 35.75%.

Do I pay National Insurance on dividends?

No. Dividends carry no National Insurance — neither employee nor employer NI. That's the main reason a low-salary-plus-dividends split is efficient for company directors: dividends escape NI, though the company pays Corporation Tax on its profit before any dividend is declared.

How do I know which rate my dividends are taxed at?

Add your salary and other non-dividend income together — that fills the bands first. Whatever basic-rate band is left (up to £50,270 of total income) taxes dividends at 10.75%; dividends falling between £50,270 and £125,140 are taxed at 35.75%; anything above £125,140 is at 39.35%. Dividends can straddle two bands, so part can be taxed at one rate and part at the next.

Source: GOV.UK, Tax on dividends. Estimates only, not financial advice.