Dividend Tax Rates (2025/26)
Published on January 25, 2026
You may get dividends from owning shares in a company. You can earn some dividend income each year without paying tax.
Dividend Allowance
The tax-free dividend allowance is £500. You only pay tax on any dividend income above this amount.
Tax Rates
The rate you pay depends on your Income Tax band. Add your income from dividends to your other taxable income to work out your band.
| Tax Band | Tax Rate on Dividends |
|---|---|
| Basic rate | 8.75% |
| Higher rate | 33.75% |
| Additional rate | 39.35% |
ISAs
Dividends from shares held in an ISA are tax-free and do not count towards your dividend allowance.