💰 Dividend Tax · 2025/26
Dividend Tax Calculator
Calculate UK dividend tax for individuals — covering the £500 dividend allowance, interaction with salary & other income, personal allowance taper above £100,000, multi-band splitting, and director/shareholder planning. Includes comparison to 2026/27 rate changes (basic 10.75%, higher 35.75%). Official guidance: Tax on dividends – GOV.UK →
💰 Income Details
Employment / Pension / Other Income
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Dividend Income
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Reliefs & Allowances
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Income composition (live)
Personal Allowance
Div. Allowance (0%)
Basic rate
Higher rate
Additional rate
Total income: £0
⚠️ From April 2026 (2026/27)
Dividend rates will increase: basic rate 8.75% → 10.75%, higher rate 33.75% → 35.75%. Additional rate stays at 39.35%. Use the Year Comparison tab to see the impact on your dividends.
⚠️ Disclaimer
This is an estimate. Actual tax is assessed via Self Assessment. Does not cover Scottish income tax bands, EIS/SEIS, VCT exemptions, or foreign dividend credits.
Tax on dividends – GOV.UK →
💰 Dividend Tax Result
2025/26 · UK rates
Enter dividend income and click Calculate.
🏢 Director / Owner-Manager Planning Optimal salary + dividend mix
Classic owner-manager structure
Many directors pay a low salary (often at the NI secondary threshold £9,100 or primary threshold £12,570) to preserve CT deductibility with minimal NI, then extract remaining profit as dividends taxed at dividend rates. This tool models that.
Company & Personal Details
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Quick Presets
🏢 Director Planning Result
Combined CT + Dividend Tax
Enter profit and extraction details and click Run Analysis.
📅 Year Comparison 2025/26 vs 2026/27
Rate Changes from 6 April 2026
Basic rate: 8.75% → 10.75% (+2pp). Higher rate: 33.75% → 35.75% (+2pp). Additional rate: 39.35% → unchanged. Dividend allowance: £500 → £500 (unchanged).
Your Details
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📅 Year Comparison
2025/26 vs 2026/27 dividend rates
Enter income and click Compare.
📋 Dividend Tax Reference 2025/26
Dividend tax rates
| Tax band | Taxable income | 2025/26 | 2026/27 From Apr 2026 |
|---|---|---|---|
| Zero (allowance) | First £500 | 0% | 0% |
| Basic rate | £12,571 – £50,270 | 8.75% | 10.75% |
| Higher rate | £50,271 – £125,140 | 33.75% | 35.75% |
| Additional rate | Over £125,140 | 39.35% | 39.35% |
Allowances & thresholds 2025/26
| Item | Amount | Notes |
|---|---|---|
| Personal Allowance | £12,570 | Tapers £1 for every £2 over £100,000; zero by £125,140 |
| Dividend Allowance | £500 | Counts toward band; 0% rate applies |
| Basic rate band | £12,571 – £50,270 | Income above PA up to £50,270 |
| Higher rate band | £50,271 – £125,140 | — |
| Additional rate | Over £125,140 | PA fully withdrawn |
| Personal Savings Allowance (basic) | £1,000 | Interest up to £1,000 tax-free (basic rate taxpayers) |
| Personal Savings Allowance (higher) | £500 | Interest up to £500 tax-free (higher rate taxpayers) |
Historical dividend allowance
| Tax year | Dividend allowance |
|---|---|
| 2016/17 | £5,000 |
| 2017/18 – 2022/23 | £2,000 |
| 2023/24 | £1,000 |
| 2024/25 onwards | £500 |
Self Assessment rules for dividends
| Situation | Self Assessment required? |
|---|---|
| Dividends over £10,000 | Yes — must file SA return |
| Dividends £500 – £10,000 (unpaid tax) | Yes — HMRC may adjust via PAYE or require SA |
| All dividends within £500 allowance | Usually no SA needed |
| Income over £100,000 (PA taper) | Yes — always SA required |
Personal Allowance Trap — 60% effective rate
Between £100,000 and £125,140 you lose £1 of PA for every £2 of income. This means income in this range effectively faces a 60% income tax rate (40% higher rate + 20% on income newly exposed by loss of PA). Pension contributions or Gift Aid payments reduce adjusted net income and can recover the allowance.
Ordering of income for tax purposes
HMRC treats income as stacked in a fixed order: (1) non-savings income (salary, pension, rental), (2) savings income (interest), (3) dividend income. Dividends are always the top slice, meaning they take up the remaining band after other income is allocated. This can push dividends into higher bands even if salary alone would be basic-rate.