{"id":3992,"date":"2022-09-01T13:42:38","date_gmt":"2022-09-01T12:42:38","guid":{"rendered":"https:\/\/cloud9accountingteam.co.uk\/?p=3992"},"modified":"2026-11-06T14:46:35","modified_gmt":"2026-11-06T14:46:35","slug":"take-advantage-of-the-dividend-allowance","status":"publish","type":"post","link":"https:\/\/cloud9accountingteam.co.uk\/sk\/take-advantage-of-the-dividend-allowance\/","title":{"rendered":"Dividend Allowance and Dividend Tax in 2026\/27"},"content":{"rendered":"

Last reviewed: November 2026<\/em><\/p>\n

The tax-free dividend allowance is \u00a3500 for 2026\/27, and dividend tax rates for basic and higher rate taxpayers went up by 2 percentage points on 6 April 2026. If you take dividends from your own limited company, your tax bill for this year will be higher than last year on the same income.<\/p>\n\n\n\n\n\n\n\n\n
Band<\/th>\n2025\/26<\/th>\n2026\/27<\/th>\n<\/tr>\n<\/thead>\n
Dividend allowance<\/td>\n\u00a3500<\/td>\n\u00a3500<\/td>\n<\/tr>\n
Basic rate<\/td>\n8.75%<\/td>\n10.75%<\/td>\n<\/tr>\n
Higher rate<\/td>\n33.75%<\/td>\n35.75%<\/td>\n<\/tr>\n
Additional rate<\/td>\n39.35%<\/td>\n39.35%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

These rates apply across the whole UK, including Scotland. Scottish income tax rates do not apply to dividends.<\/p>\n

What it means for a typical director<\/h3>\n

A director who takes a \u00a312,570 salary and \u00a340,000 in dividends pays about \u00a34,821<\/strong> in dividend tax for 2026\/27, compared with \u00a34,031<\/strong> for 2025\/26: around \u00a3790 more for the same income.<\/p>\n

Ways to reduce the impact<\/h3>\n