Figures checked on 24 September 2026
The dividend allowance is the first £500 of dividends you receive in a tax year, 6 April to 5 April, which is taxed at 0%. It was £2,000 as recently as 2022/23. Dividends inside an ISA or a pension don't count towards it. Above it, dividends are taxed at the dividend tax rate for the tax band they land in: for 2026/27, 10.75% in the basic-rate band, 35.75% in the higher-rate band and 39.35% in the additional-rate band. The first two rose by two percentage points in April 2026.
Dividends count as the top slice of your income, so your salary, pension and other income decide which band they land in. Any that fall within your personal allowance aren't taxed, and the £500 still uses up part of its band. If your dividends total £10,000 or less, tax above the allowance can be collected through your tax code if you tell HMRC; above £10,000 you need to file a Self Assessment return. Most of the app's dividend figures are before any tax, include dividends inside ISAs and pensions, and cover the last twelve months rather than the tax year. The Tax Year widget is the exception: it counts one tax year's dividends from holdings outside ISAs and pensions, against the allowance, and estimates the tax. Like the rest of the app it records foreign dividends before tax withheld abroad.
Illustrative, at 2026/27 rates. The same £2,000 in the higher-rate band would cost £715.
Educational content only. It is not personal financial advice.