Guide

Which Tax Year Does a Dividend Belong To?

Written by James Whitfield · Last reviewed 19 October 2026 · Checked against 2026/27 HMRC rates

The company's accounting year, the date the board met and the date money reached your bank can all differ. For tax, one date matters: when the dividend was paid, meaning due and payable. Getting it right decides which year's rates and allowances apply.

Quick answer

A dividend is taxed in the tax year (6 April to 5 April) in which it is paid, meaning when it becomes due and payable, not the company's year end.¹ A final dividend becomes due on the payment date set in the resolution, or on the date it is declared if no date is set.¹ An interim dividend can be varied or cancelled until it is paid, so it counts only when paid, for example when the money is credited to a director's loan account you can draw on.¹² So an interim dividend minuted on 31 March 2027 but paid on 8 April 2027 belongs to 2027/28.

Key facts

Tax year: 6 April to 5 April. A dividend falls in the year it is paid (due and payable).¹
Final dividend: due on the payment date in the resolution; if none, on the declaration date.¹
Interim dividend: can be varied or rescinded before payment, so it counts when paid.¹
Crediting a loan account the shareholder can draw on counts as payment; HMRC expects the book entries to be made.²
A waived dividend is not paid.²

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Final and interim dividends: the rules

HMRC's Savings and Investment Manual explains that a final dividend becomes due and payable on the date the resolution says it is payable. If no date is given, the declaration itself creates an immediately enforceable debt, so the declaration date is the due date.¹

An interim dividend, usually decided by the directors during the year, can be varied or rescinded at any time before payment. It is therefore due and payable only when it is actually paid.¹ HMRC's Company Taxation Manual adds that a dividend is paid when the shareholder receives the money or it is otherwise made fully available, for instance credited to a loan account they can draw on.²

Final dividend with a payment date	Taxed when the payment date arrives
Final dividend, no payment date	Taxed on the declaration date
Interim dividend	Taxed when paid or credited to an account you can draw on
Dividend waived before payment	Not paid, not taxed

Worked example: three dividends around 5 April 2027

Hannah runs her own company with a 31 March year end. Here is how three dividends fall for her personal tax.

Interim minuted 31 March 2027, paid to her bank 8 April 2027	2027/28
Interim minuted 20 March 2027, credited to her loan account 25 March 2027	2026/27
Final approved 28 February 2027, payable 10 April 2027	2027/28

The company's year end (31 March 2027) does not decide the tax year. Dividends paid in 2027/28 are taxed at that year's rates and use that year's £500 allowance.

Using the timing in planning

Because interim dividends count when paid, directors often time them to use each year's basic-rate band and £500 allowance. With a £12,570 salary in 2026/27, £37,200 of dividends above the allowance is taxed at 10.75% before 35.75% starts.

The timing has to be real. Make the book entries when the dividend is paid; HMRC notes that entries delayed to a later accounting period move the payment date into that later period.² Dividends also have to be lawful: covered by retained profits, minuted and supported by a voucher.

Listed shares: payment date, not ex-dividend date

For quoted shares and funds, the ex-dividend and record dates decide who is entitled to the dividend, but the tax year follows when it is due and payable: the payment date.¹ A dividend that goes ex in March 2027 but is paid on 10 April 2027 is 2027/28 income. Check the payment date on your dividend statement or tax certificate.

Plan this year's dividends

Work out salary, dividends and tax for 2026/27.

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How to declare a dividend Unlawful dividends Salary and dividend split 2026/27 When dividend tax is due

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.

HMRC Savings and Investment Manual SAIM5040: dividends and company law ↗ https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim5040
HMRC Company Taxation Manual CTM15205: dividends, distributions and company law ↗ https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm15205
Tax on dividends ↗ https://www.gov.uk/tax-on-dividends

Verified against published UK government guidance.

Frequently asked questions

Is a dividend taxed when it is declared or when it is paid?

When it is paid, meaning due and payable. For a final dividend that is the payment date set in the resolution, or the declaration date if none is set. An interim dividend counts only when it is actually paid.

Does the company's year end decide the tax year of a dividend?

No. Your personal tax year runs from 6 April to 5 April, and each dividend falls in the year it is paid, whatever the company's accounting period.

Which date do I use for foreign or listed dividends: ex-dividend or payment date?

The payment date, when the dividend is due and payable. The ex-dividend date only decides who is entitled to it.

Does crediting a dividend to my director's loan account count as paying it?

Yes, if the amount is placed at your disposal so you can draw on it. HMRC expects the entries to be made in the company's books at the time.

Can I move an interim dividend into the next tax year?

An interim dividend can be varied or rescinded before payment, so one paid after 5 April is taxed in the new tax year. The payment must genuinely happen then, and the dividend must be covered by retained profits.

Disclaimer: General information about UK tax for 2026/27, not personal tax advice. Figures assume England, Wales or Northern Ireland income tax bands unless stated.