What is the dividend allowance for 2026/27?

The dividend allowance is £500 for 2026/27. Dividends up to this amount are tax-free regardless of your income tax band.

Are dividends taxed at the same rate as salary?

No — dividend rates are lower than income tax rates. For 2026/27 they are 10.75% at the basic rate, 35.75% at the higher rate and 39.35% at the additional rate. The basic and higher rates each rose by 2 percentage points in April 2026. Dividends are stacked on top of your salary, so your salary determines which band they fall into. Worked example: with a £40,000 salary and £10,000 of dividends, the first £500 is covered by the dividend allowance and the remaining £9,500 is taxed at 10.75%, giving £1,021.25.

Do I need to declare dividends under £500?

If your total dividend income is £500 or less, you do not need to report it to HMRC. Above £500, you must declare dividends via self assessment.

Dividend Tax Calculator 2026/27

Calculate the tax due on dividends received in 2026/27. Enter your dividend income and other earnings to see how much falls into each rate band.

UK rates for the 2026/27 tax year · last checked against GOV.UK on 6 April 2026

How it's calculated

Dividend allowance: £500. Rates from 6 April 2026: 10.75% (basic rate band), 35.75% (higher rate band), 39.35% (additional rate band). Dividends are treated as the top slice of income.

Rates and sources

This calculator uses UK rates for the 2026/27 tax year, last checked against GOV.UK on 6 April 2026.

Tax on dividends — official guidance:

Rates change, usually at the start of a tax year in April. Always confirm against GOV.UK before relying on a figure for a filing or a financial decision.

Frequently Asked Questions

What is the dividend allowance for 2026/27?: The dividend allowance is £500 for 2026/27. Dividends up to this amount are tax-free regardless of your income tax band.
Are dividends taxed at the same rate as salary?: No — dividend rates are lower than income tax rates. For 2026/27 they are 10.75% at the basic rate, 35.75% at the higher rate and 39.35% at the additional rate. The basic and higher rates each rose by 2 percentage points in April 2026. Dividends are stacked on top of your salary, so your salary determines which band they fall into. Worked example: with a £40,000 salary and £10,000 of dividends, the first £500 is covered by the dividend allowance and the remaining £9,500 is taxed at 10.75%, giving £1,021.25.
Do I need to declare dividends under £500?: If your total dividend income is £500 or less, you do not need to report it to HMRC. Above £500, you must declare dividends via self assessment.