Dividend Tax Rates and Allowance
How much tax is paid on dividends from shares held outside an ISA, and the tax-free dividend allowance.
Dividend allowance
£500
The first £500 of dividend income each tax year is tax-free, whatever your tax band. Dividends inside an ISA don't count.
GOV.UK — HMRC · checked 30 Sep 2026
Basic rate on dividends
10.75%
Up from 8.75% on 6 April 2026. Scottish taxpayers use these UK dividend rates too.
GOV.UK — HMRC · since 6 Apr 2026 · checked 30 Sep 2026
Higher rate on dividends
35.75%
Up from 33.75% on 6 April 2026.
GOV.UK — HMRC · since 6 Apr 2026 · checked 30 Sep 2026
What's changed
- 6 April 2026 Higher rate on dividends rose from 33.75% to 35.75%.
- 6 April 2026 Basic rate on dividends rose from 8.75% to 10.75%.