Dividend Tax
Tax payable on dividend income received from shares in UK and overseas companies, above the Dividend Allowance. The rate you pay depends on which income tax band the dividends fall into when added on top of your other income. Dividends are always treated as the top slice of income for this calculation.
Related Terms
Dividend Allowance
The amount of dividend income you can receive each tax year completely free of tax, currently set at £500.
Dividend Tax Rates
The rates at which dividends are taxed in excess of the Dividend Allowance.
Basic Rate
The standard income tax rate of 20% applied to taxable income between the Personal Allowance and the higher-rate threshold, currently £12,571 to £50,270 in England, Wales, and Northern Ireland.
Higher Rate
The income tax rate of 40% applied to taxable income above £50,270 up to £125,140 in England, Wales, and Northern Ireland.
Additional Rate
The highest income tax rate in England, Wales, and Northern Ireland, charged at 45% on taxable income above £125,140.
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