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Your dividends fall across the 2025/26 rates: 0% (allowance), 8.75% (basic), 33.75% (higher), 39.35% (additional). Note: Bands after Personal Allowance (Reference: HMRC / GOV.UK).
Your non-dividend income affects available bands:
What is Dividend Tax? dividend tax applies to income from shares and investments. For 2025/26, the first £500 is tax-free (dividend allowance). Remaining dividends are taxed at lower rates than income tax: 8.75% (basic rate taxpayers), 33.75% (higher), 39.35% (additional). Dividends rank after salary and interest for band allocation.
Key Impacts: The allowance was reduced from £1,000 in 2024/25 to £500. Personal Allowance (£12,570) tapers for incomes £100,000–£125,140. Over 4 million UK taxpayers receive dividends annually.
Eligibility: Applies to UK residents. Use this for estimates; report via Self Assessment if over allowance.
Current Status: Rates frozen until 2028 per Autumn Budget 2024. For 2025/26 (6 April 2025–5 April 2026), use official HMRC guidance.
Review the HMRC dividend tax guidance for detailed rules.
Contact us for further assistance.
Estimates based on 2025/26 HMRC rates: £500 allowance @0%, then 8.75%/33.75%/39.35% per band, including Personal Allowance taper.
Actual liability may vary with other factors (e.g., savings income). Consult a tax advisor or HMRC for official advice.
For official updates, visit HMRC or GOV.UK rates.