Answers · UK 2025/26
How much tax will I pay on GBP 10,000 of dividends in 2026/27?
On GBP 10,000 of dividends in 2026/27 the first GBP 500 is covered by the dividend allowance. The remaining GBP 9,500 is taxed at 10.75% if you are a basic-rate taxpayer (GBP 1,021.25), 35.75% if higher-rate (GBP 3,396.25), or 39.35% if additional-rate.
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Dividends in 2026/27 have a tax-free dividend allowance of GBP 500. Above that, dividends are taxed at 10.75% in the basic band, 35.75% in the higher band and 39.35% in the additional band. Dividends are treated as the top slice of your income, so the rate depends on which band the dividends fall into once stacked on your other income. Worked example: Sarah takes a GBP 9,100 salary from her company and GBP 10,000 in dividends. Her salary plus dividends total GBP 19,100, well within the basic-rate band (which runs to the GBP 50,270 higher-rate threshold). The first GBP 500 of dividends is covered by the allowance. The remaining GBP 9,500 is taxed at the basic dividend rate of 10.75%, giving a bill of GBP 1,021.25. Now take David, who has a GBP 55,000 salary and GBP 10,000 of dividends. His salary already uses his Personal Allowance and pushes him into the higher band, so all his dividends sit in the higher band. After the GBP 500 allowance, the remaining GBP 9,500 is taxed at 35.75%, a bill of GBP 3,396.25. This shows why the same GBP 10,000 of dividends can cost very different amounts depending on your other income. Use the dividend-tax calculator to enter your salary and dividends together and see the band split, and the dividend-vs-salary calculator if you are a company director deciding how to extract profit. For HMRC's current rules, check gov.uk.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.