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Dividend Allowances

Dividend Allowances

You may get a dividend payment if you own shares in a company. You only have to pay tax if your dividends go above your dividend allowance in the tax year.
 

The rules are different for dividends before 6 April 2016 - See further down

Tax year Dividend allowance
6 April 2018 to 5 April 2019 £2,000
6 April 2017 to 5 April 2018 £5,000
6 April 2016 to 5 April 2017 £5,000

Dividend Tax Rates

Above the Dividend Allowance the tax you pay depends on which Income Tax band you’re in. Add your income from dividends to your other taxable income when working this out. You may pay tax at more than one rate.
Tax band Tax rate on dividends over your allowance
Basic rate 7.5%
Higher rate 32.5%
Additional rate 38.1%

ISA and Personal Allowances

You don’t pay tax on dividends from shares in an ISA.

Dividends that fall within your Personal Allowance do not count towards your dividend allowance.

Tax on dividends before 6 April 2016

There were different rules for tax on dividends before 6 April 2016. The tax you pay depends on which Income Tax bands your dividends are in. Add your other taxable income to your dividends to work out the band they’re in. You may pay tax at more than one rate.
Tax band Effective dividend tax rate
Basic rate (and non-taxpayers) 0%
Higher rate 25%
Additional rate 30.56%
Additional rate - dividends paid before April 2013 36.11%