Dividend tax rates
Dividend tax in 2024/25, 2025/26 and 2026/27: rates, £500 nil-rate allowance, Personal Allowance and cross-band examples.
When and how dividend tax applies
For the tax years ending 5 April 2025, 5 April 2026 and 5 April 2027, taxable dividends above available Personal Allowance first use a £500 nil-rate Dividend Allowance. The £500 still counts towards income and occupies rate-band space; it is not deducted when deciding which band later dividends enter.
Dividend income is normally the top slice after non-savings and savings income. Gross other income can therefore move dividends into the upper or additional dividend rate even if the dividend payment itself is small.
The standard Personal Allowance is £12,570. It falls by £1 for every £2 of adjusted net income above £100,000 and is zero at £125,140. Reliefs can change adjusted net income; the linked calculator assumes it equals its two entered income amounts.
Rule summary
Dividend tax years and rates
Each tax year runs 6 April to 5 April. The standard Personal Allowance is £12,570; it tapers above £100,000 adjusted net income and reaches zero at £125,140. The basic taxable band is £37,700.
The Dividend Allowance is £500 in all three supported years. It is taxed at 0% but still occupies the taxpayer's income-tax band.
| Tax year | Ordinary/basic | Upper/higher | Additional |
|---|---|---|---|
| 2024/25 | 8.75% | 33.75% | 39.35% |
| 2025/26 | 8.75% | 33.75% | 39.35% |
| 2026/27 | 10.75% | 35.75% | 39.35% |
Worked examples
How the rule behaves in practice
- 2026/27 ordinary-rate example: £29,570 other non-savings income and £3,000 dividends: £12,570 Personal Allowance leaves £17,000 taxable other income. £500 dividends are nil-rated; £2,500 at 10.75% gives £268.75 estimated dividend tax.
- Dividends cross a band: In 2026/27, £47,570 other income and £3,000 dividends leave £35,000 taxable other income after Personal Allowance. The £500 nil-rate slice uses band space; £2,200 is at 10.75% and £300 at 35.75%, giving £343.75 dividend tax.
Practical consequences
- A common mistake is subtracting the £500 Dividend Allowance before locating dividends in the tax bands. That can understate tax when a payment crosses a band; the worked examples above show the correct nil-rate treatment.
- The 2026/27 ordinary and upper rates differ from 2025/26. Select the tax year of receipt rather than carrying forward a previous-year percentage.
- Do not treat a dividend-only figure as total personal income tax. Personal Allowance taper can also increase tax on other income; the calculator shows only the dividend-tax component. Scottish non-dividend rates can alter optimal allowance allocation although dividend rates are UK-wide.
Important limits
- Scottish cases return review required because Scottish non-dividend rates can affect Personal Allowance allocation, although dividend rates are UK-wide.
- Savings, pension/Gift Aid band extensions, other reliefs and special allowances are excluded; select No if any apply.
- This estimates the dividend-tax component, not total tax. The indirect tax effect of losing Personal Allowance is not included in that component.
Primary sources and review date
Reviewed on . Preserved source review from the accepted scoped statutory repair; this contract migration does not re-date that review.
Applies to: Tax years 2024/25 through 2026/27; selected year's dividend rates, allowance and bands.
Reviewed scope: England, Wales or Northern Ireland resident with non-savings income and dividends only; bounded personal-tax estimate, not full Self Assessment.
- HMRC Income Tax rates and allowances (2024/25–2026/27) (verified 25 September 2026)Supports: HMRC Income Tax rates and allowances (2024/25–2026/27)
- GOV.UK tax on dividends and worked example (verified 25 September 2026)Supports: GOV.UK tax on dividends and worked example
- HMRC SAIM1090: income ordering and Personal Allowance (verified 25 September 2026)Supports: income ordering and Personal Allowance
Review basis and change triggers
Reviewed model: dividend-tax-calculator: dividend-tax-rates-2024-25-through-2026-27-reviewed-25 September 2026
- A cited source or statutory regime changes.
- Reviewed content, runtime adapter or domain implementation changes.
- A new effective period falls outside the supported scope.
Turn the result into an action plan
- Use the linked Dividend Tax Calculator for a standard England/Wales/Northern Ireland case with gross other non-savings income and dividends.
- Check the exact tax year, whether dividends are taxable outside an ISA, and whether savings, Gift Aid, pension contributions or other reliefs affect bands or adjusted net income.
- Get a full personal-tax calculation for Scottish cases, specialist reliefs, non-residence or disputed income classification rather than extending this estimate by assumption.
Use the tool
Dividend Tax Calculator
Estimate the dividend-tax component for 2024/25, 2025/26 or 2026/27 from gross dividends and other non-savings income, with a band-by-band breakdown.