Guides

Dividend Tax Guides 2026/27

In-depth UK dividend tax guides for contractors, investors, directors and retirees. All rates and allowances reflect the 2026/27 tax year.

Guide
Dividend Tax for Contractors
Dividend tax for contractors taking income via their limited company.
Guide
Dividend Tax for Investors
How dividend tax works for private investors and shareholders.
Guide
Dividends and Self Assessment
When and how to report dividend income through Self Assessment.
Guide
Dividends Inside an ISA
Why dividends inside a Stocks & Shares ISA are completely tax-free.
Guide
Dividend Tax: Higher-Rate Taxpayers
Dividend tax at 35.75% for higher-rate taxpayers in 2026/27.
Guide
Dividend Tax: Basic-Rate Taxpayers
How the 10.75% dividend tax rate applies to basic-rate taxpayers in 2026/27.
Guide
Dividend Tax: Additional-Rate Taxpayers
Dividend tax at 39.35% for additional-rate taxpayers above £125,140.
Guide
Dividend Tax and ISA
ISA dividends are fully exempt — no tax regardless of amount.
Guide
Dividend Personal Allowance
How the personal allowance interacts with dividend income.
Guide
Dividend Tax for Retirees
Dividend tax planning for retirees drawing from investment portfolios.
Guide
Additional-Rate Dividend Tax
Dividend tax at 39.35% for income above £125,140 in 2026/27.
Guide
Salary & Dividend Split 2026/27
The most tax-efficient director pay split: £12,570 salary plus dividends.

How dividend tax works in 2026/27

Dividend income has its own tax rates, separate from the rates on salary or savings. Everyone gets a £500 tax-free dividend allowance for 2026/27. Above that, dividends are taxed at 10.75% while they fall in the basic-rate band, 35.75% in the higher-rate band, and 39.35% on income above £125,140.

Because dividends sit on top of your other income, the same dividend can be taxed at more than one rate — part at 10.75% and part at 35.75%, for example — depending on how much of your basic-rate band your salary has already used. These guides walk through the common situations: contractors and company directors balancing salary and dividends, investors living off portfolio income, and retirees drawing dividends alongside a pension. If your only untaxed income is dividends above the allowance, you normally report it through Self Assessment.

Written and reviewed by James Whitfield and the editorial team.

Every figure is checked against current HMRC and GOV.UK guidance and reviewed for the 2026/27 tax year. We explain the numbers in plain English with worked examples. Editorial standards · About us