Dividends above the dividend allowance: when to report and how they are taxed

You received dividends from shares or funds held outside an ISA, and together they came to more than the £500 dividend allowance.

You do not pay tax on dividend income that falls within your Personal Allowance — the amount of income you can earn each year without paying tax, normally £12,570. You also get a dividend allowance of £500 each year, and only pay tax on dividend income above it. Dividends from shares in an ISA are not taxed.

The rate depends on your Income Tax band. To work out your band, add your total dividend income to your other income — you may pay tax at more than one rate. For 2025 to 2026 the rates on dividends above the allowance are:

• 8.75% within the basic rate band
• 33.75% within the higher rate band
• 39.35% within the additional rate band

gov.uk's main dividends page shows the rates for the current tax year, which are not the same as the 2025 to 2026 rates above.

When to tell HMRC. You must tell HMRC every year you receive dividends you have tax to pay on. You do not need to tell HMRC if your dividends are within the dividend allowance. If you send a Self Assessment return, you report any dividend income on it by the deadline.

If you do not send a return, how you tell HMRC depends on how much you received, and gov.uk sets the dividend amount that divides the two routes. Below it, you let HMRC know after the end of the tax year (5 April) and before 5 October, either by asking HMRC to update your tax code — so the tax is taken from your wages or pension — or by contacting the helpline. Above it, you need to fill in a Self Assessment return, and must tell HMRC by registering for Self Assessment by 5 October after the end of the tax year. gov.uk: how to report tax on dividends →

• Dividend vouchers or statements for each dividend.
• Your broker's or fund platform's annual tax summary, showing which holdings were inside an ISA and which were not.
• Details of your other income for the year, such as pay and pension, since together with your dividends it sets your tax band.

If you send a Self Assessment return, your dividend income goes on it — gov.uk says any dividend income, not only the part above the allowance. Dividends from foreign companies have their own section on the 'Foreign' pages (SA106), which is also where Foreign Tax Credit Relief is claimed. Foreign dividends with tax taken off →

Taxseas covers:

• Dividends from shares or funds

Upload the documents above in any format and Taxseas reads what it needs. You see every figure Taxseas extracts and can adjust anything that is off. Today, Taxseas prepares your complete, reviewed return and gives you the exact figures to enter in your HMRC online account. See what Taxseas covers →