How it works
Apply unused Personal Allowance, then the £500 dividend allowance. Tax remaining dividends at 10.75%, 35.75% or 39.35% as they fall into the income bands.
A worked example
With £35,000 other income and £5,000 dividends, the dividend tax estimate is £483.75.
What to keep in mind
2026/27. Other income is assumed to be non-savings income. Dividends sit above it. The £500 allowance still uses tax-band space. Excludes savings income, pensions, reliefs and foreign tax credits. This result is dividend tax only.
A common question
Is the dividend allowance extra Personal Allowance?
No. It is a zero-rate allowance, and those dividends still count towards income tax bands and the Personal Allowance taper.
Sources & rates
Rates checked on 23 September 2026.
For general information and planning, not personalised financial or tax advice. Verify important decisions with a qualified adviser.