Dividend allowance and dividend tax rates, 2026–27
Dividend income has its own allowance and rates. The allowance does not establish a taxpayer’s band, and dividends inside an ISA have separate exemption rules.
- Dividend allowance
- £500 for 2026–27.HMRC, Income Tax rates and allowances
- Rates above the allowance
- Basic 10.75%; higher 35.75%; additional 39.35% for 2026–27.HMRC, Income Tax rates and allowances
Allowance and rates
HMRC’s 2026–27 table lists a £500 dividend allowance. Dividend income above the allowance is taxable unless another applicable exemption or unused Personal Allowance covers it. HMRC, Tax on dividends (opens in a new tab).
The published 2026–27 dividend rates are 10.75% in the basic band, 35.75% in the higher band and 39.35% in the additional band. These are statutory tax rates published by HMRC, not investment returns. HMRC, Income Tax rates and allowances (opens in a new tab).
Income determines the band
HMRC explains that total dividend income is added to other income to establish the tax band. The dividend allowance is separate from the Personal Allowance. HMRC, Tax on dividends (opens in a new tab).
Dividends from shares held in an ISA are not taxed. That exemption belongs to the wrapper and is distinct from the dividend allowance outside it. HMRC, Tax on dividends (opens in a new tab).
Reporting and limits of this page
How dividends are reported depends on the amount received and whether a Self Assessment return is already filed. HMRC’s reporting guidance distinguishes those cases. HMRC, Tax on dividends (opens in a new tab).
The site’s UK income tax calculator excludes dividend allowances and does not apply dividend tax rates. No matching dividend calculator or calculated tax example is provided here.
This is general information adapted from HMRC material under the Open Government Licence v3.0, without endorsement. It explains the published rules and does not recommend investments or assess a personal tax liability. HMRC, Income Tax rates and allowances (opens in a new tab).