Dividend Tax Rates Rise 2% from April 2026 for Basic and Higher Earners
Investors face higher dividend tax bills from the start of the 2026-27 tax year. Basic rate rises from 8.75% to 10.75%, higher rate from 33.75% to 35.75%. The additional rate remains at 39.35%.
From 6 April 2026, the basic and higher rates of tax on dividend income increased by 2% to: 10.75% (basic), 35.75% (higher), and 39.35% (additional – no change). This is part of wider tax reforms announced in the Autumn Budget 2025, which targeted investment income while keeping headline rates of income tax and National Insurance unchanged.
Who is affected?
Anyone earning dividend income will see their tax bill rise:
- Basic rate taxpayers now pay 10.75% instead of 8.75%
- Higher rate taxpayers now pay 35.75% instead of 33.75%
- Additional rate remains steady at 39.35%
These changes apply across England, Wales, and Northern Ireland. Further rises are confirmed for April 2027, when rates of tax for property and savings income will increase by 2% to: 22% (basic), 42% (higher), and 47% (additional).
What this means for you
If you're an expat or foreign national living in the UK with UK rental property, investment income, or shares, your personal tax liability has increased from April. Use HMRC's dividend allowance (currently £500 for basic rate taxpayers) to shelter some income, or consider timing investment sales before dividend ex-dates. Freelancers and contractors receiving dividend income from UK companies should review their 2026-27 tax projections with an accountant to avoid an unexpected bill.
Sources
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