How are dividends taxed?
16 May 2023 (Updated 25 June 2023)
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Updated for the Tax year 06/04/2023 – 05/04/2024.
In a nutshell
Your annual dividends allowance is £1,000. Beyond that, the tax amount depends on your Income Tax band:
| Tax band | Tax rate on dividends over the dividend allowance | Tax rate on salaried income over the personal allowance (Comparison) |
| Basic rate (£12,571 – £50,270) | 8.75% | 20% |
| Higher rate (£50,271 – £125,140) | 33.75% | 40% |
| Additional rate (over £125,140) | 39.35% | 45% |
Use this online tool to calculate how much dividends you may have to pay.
Sources
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Accounting