Dividend Tax UK: Rates, Allowances & How Much Can You Take Tax-Free

Tax Guides · 9 min read · Updated 2026-03-20

Understand how dividends are taxed in the UK, the dividend allowance for 2025/26, how to calculate dividend tax, and the most tax-efficient way to pay yourself from your limited company.

Written by Krishna, Founder & HMRC-registered tax agent at TaxRoot.

How much dividend can I take tax-free in 2025/26?

The dividend allowance for 2025/26 is £500, meaning the first £500 of dividend income is tax-free regardless of your total income. Additionally, if your total income including dividends is within your personal allowance of £12,570, you will not pay any tax on that income.

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