Domesday Live

Tax on dividends: how the rate has changed

Earnings and savings. Dividends are payments a company makes to its shareholders. They are taxed at their own rates, which are lower than the rates on pay. Since April 2016 the first slice of dividends each year is tax free, under the dividend allowance. Before 2016 dividends came with a notional tax credit, so the rates are not comparable and the chart starts there.

Worth knowing

• From April 2026 the basic and higher dividend rates rose by two points, to 10.75% and 35.75%. The top rate stayed at 39.35%.