UK Dividend Calculator (2026/27)
Dividend income and dividend tax for England, Wales and Northern Ireland, with a Stocks and Shares ISA vs general investment account (GIA) comparison. Enter your portfolio, its yield and your other income to see this year's tax, where it falls in the bands, and what an ISA would save over the years. Results update instantly, with every step of the sum shown. No sign-up.
For England, Wales and Northern Ireland. Assumes a standard Personal Allowance and that today's 2026/27 rates and allowances and your other income stay the same every year.
- Dividend income, year 1£0
- Tax this year — general investment account£0
- Tax this year — Stocks and Shares ISA£0
- Annual dividends after 10 years (gross)£0
- Portfolio after those years (gross)£0
- Tax an ISA saves over 10 years£0
Dividend income each year, and the GIA tax on it
Each bar is a year's gross dividend income. Amber = the Income Tax it would add in a general investment account. Green = what you keep. In an ISA the whole bar is yours.
Quick answer
With £75,000 yielding 4% and £29,570 of other income (England, Wales or Northern Ireland, 2026/27), you get about £3,000 of dividends this year. Held in a general investment account that adds £268.75 of Income Tax; in a Stocks and Shares ISA it is £0. Over 10 years with dividends reinvested, the ISA would save about £4,622. Assumes today's 2026/27 rates and allowances and your other income stay the same each year. Tax rules can change and depend on your circumstances.
Year by year: ISA vs general investment account
Using your inputs. Long periods show selected years; year 1 is highlighted.
| Year | Portfolio at start | Dividends | GIA tax | ISA tax | Cumulative ISA saving |
|---|
Reinvesting vs taking the income
Both projections are before tax; your choice is highlighted.
| Dividends | Portfolio at the end | Annual dividends then | Tax an ISA saves |
|---|
How dividends are taxed in 2026/27
GOV.UK sets out three things that decide whether you pay tax on dividends:
- Personal Allowance: you do not pay tax on any dividend income that falls within your Personal Allowance (£12,570 as standard).
- Dividend allowance: you also get a dividend allowance of £500 each year, and you only pay tax on dividend income above it.
- ISAs: you do not pay tax on dividends from shares in an ISA.
Above those, the rate depends on your Income Tax band. GOV.UK: “To work out your tax band, add your total dividend income to your other income. You may pay tax at more than one rate.”
| Tax band | Rate on dividends over the allowance (6 April 2026 to 5 April 2027) |
|---|---|
| Basic rate | 10.75% |
| Higher rate | 35.75% |
| Additional rate | 39.35% |
The 2026/27 Income Tax bands this uses
For England, Wales and Northern Ireland, GOV.UK lists these bands (with the standard Personal Allowance):
| Band | Taxable income | Rate on other income |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | over £125,140 | 45% |
The Personal Allowance goes down by £1 for every £2 of adjusted net income over £100,000, and is zero from £125,140. Dividends count towards that income, so in a general investment account they can shrink your allowance; the calculator includes the extra tax this causes on your other income. Dividends inside an ISA are not taxed and this calculator does not count them as income.
The GOV.UK example, reproduced
GOV.UK's worked example for the 2026 to 2027 tax year:
“You get £3,000 in dividends and earn £29,570 in wages in the 2026 to 2027 tax year. This gives you a total income of £32,570. You have a Personal Allowance of £12,570. Take this off your total income to leave a taxable income of £20,000. This is in the basic rate tax band, so you would pay: 20% tax on £17,000 of wages; no tax on £500 of dividends, because of the dividend allowance; 10.75% tax on £2,500 of dividends.”
The calculator's default inputs give the same year: £75,000 × 4% = £3,000 of dividends with £29,570 of other income.
- Wages: £29,570 − £12,570 = £17,000 taxable, at 20% = £3,400 (the same with or without the dividends).
- Dividends: £500 at 0% under the dividend allowance.
- The other £2,500 at 10.75% = £268.75 of dividend tax. In an ISA: £0.
This example is checked by an automated test (test/uk-dividend.test.js).
Same £5,000 of dividends, different other income
How much tax £5,000 of dividends adds in a general investment account in 2026/27. In an ISA, every row is £0.
| Other income | Dividends taxed (after allowances) | Extra tax in a GIA |
|---|---|---|
| £0 | £0 (all within the Personal Allowance) | £0 |
| £29,570 | £4,500 at 10.75% | £483.75 |
| £60,000 | £4,500 at 35.75% | £1,608.75 |
| £100,000 | £4,500 at 35.75%, plus £2,500 of lost Personal Allowance taxed at 40% | £2,608.75 |
| £130,000 | £4,500 at 39.35% | £1,770.75 |
At £100,000 of other income, the £5,000 of dividends takes total income to £105,000, so the Personal Allowance falls by £2,500. That costs £1,000 more on your other income on top of the £1,608.75 of dividend tax. At £130,000 there is no Personal Allowance left to lose, so the dividends only pay the additional rate.
How the calculator places your dividends in the bands
- Dividends sit on top. Your other income fills the bands first and your dividends come after it, so dividends are taxed at the rate of the band they land in — and can be split across two bands.
- Unused Personal Allowance. If your other income is below your Personal Allowance, the rest of the allowance covers dividends first.
- The £500 dividend allowance. The first £500 of taxable dividends is taxed at 0%. Following HMRC's Dividend Allowance factsheet, those dividends still count towards your basic or higher rate band, so they can affect the rate on the dividends above them.
- Most favourable use of the Personal Allowance. The law lets the allowance be set against income in the way that gives the lowest tax. In a narrow range of other income (just below the higher-rate threshold) setting part of it against dividends lowers the bill slightly; the calculator checks for this.
How the projection works
- Dividends each year = dividend yield × the portfolio's value at the start of the year.
- The portfolio's value grows at the dividend growth rate, so the yield stays the same over time.
- A year's monthly contributions are added at the end of that year. Reinvested dividends are added gross, before any tax.
- Both accounts hold the same portfolio; any GIA tax is assumed to be paid from other money. The ISA saving is the sum of each year's GIA tax.
- 2026/27 rates, bands and allowances and your other income are held constant. In reality they can change.
The ISA allowance
GOV.UK: in the 2026 to 2027 tax year, the maximum you can save in ISAs is £20,000. The calculator warns if your yearly contributions are above that, and if your starting portfolio is too big to have gone into an ISA in a single year. It does not track allowances used in earlier years or on other ISAs.
What this calculator does not cover
- Scotland. Scottish Income Tax bands for other income differ, so this tool is for England, Wales and Northern Ireland only.
- Savings interest and other allowances. Savings interest, the Personal Savings Allowance, Blind Person's Allowance and Marriage Allowance are not modelled; enter non-dividend, non-savings income only.
- Deductions that change adjusted net income, such as pension contributions or Gift Aid, are not applied.
- Capital Gains Tax and investment returns other than dividend growth are not modelled.
- Reporting. GOV.UK says that if you have dividend payments over both your unused Personal Allowance and dividend allowance, you need to report these to HMRC.
The formula
- D — dividends left after any unused Personal Allowance, placed on top of your other taxable income
- The first £500 of D is taxed at 0% but keeps its place in the bands
- Dbasic, Dhigher, Dadditional — the rest of D that lands in each band: basic up to £37,700 of taxable income, higher up to £125,140, additional above
- ISA — £0, and the dividends do not count as income
See the formula with your own numbers
These update live from the calculator inputs above (year 1).
Frequently asked questions
How much dividend income is tax-free in 2026/27?
GOV.UK says you do not pay tax on dividend income that falls within your Personal Allowance, and you also get a dividend allowance of £500 each year. You only pay tax on dividend income above the dividend allowance. Dividends from shares in an ISA are not taxed.
What are the dividend tax rates for 2026/27?
From 6 April 2026 to 5 April 2027, dividends over the allowance are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band.
How do I know which rate my dividends are taxed at?
GOV.UK: to work out your tax band, add your total dividend income to your other income. You may pay tax at more than one rate. Dividends are treated as the top slice of your income, so they sit above your salary, pension or other income in the bands.
What is the GOV.UK £3,000 dividend example?
With £3,000 of dividends and £29,570 of wages, total income is £32,570. Taking off the £12,570 Personal Allowance leaves taxable income of £20,000, all in the basic rate band: 20% on £17,000 of wages, no tax on £500 of dividends because of the dividend allowance, and 10.75% on £2,500 of dividends, which is £268.75. The calculator reproduces it with its default inputs.
Do I pay dividend tax in a Stocks and Shares ISA?
No. GOV.UK says you do not pay tax on dividends from shares in an ISA. In the 2026 to 2027 tax year the maximum you can save in ISAs is £20,000.
Method & sources
- Calculation: other income fills the bands first; any unused Personal Allowance covers dividends; the first £500 of taxable dividends is taxed at 0% but still counts towards the band it falls in; the rest is taxed at 10.75%, 35.75% or 39.35% by band; Personal Allowance reduced £1 for every £2 over £100,000 and set against income in the way that gives the lowest tax. GIA tax = Income Tax with the dividends minus Income Tax without them. ISA tax = £0.
- Dividend allowance, dividend rates 2026 to 2027, ISA exemption and the £3,000 example: GOV.UK — gov.uk/tax-on-dividends.
- Income Tax rates, bands and Personal Allowance, 2026 to 2027: GOV.UK — gov.uk/income-tax-rates.
- ISA allowance 2026 to 2027: GOV.UK — gov.uk/individual-savings-accounts.
- Dividends as the top slice, and dividends within the allowance counting towards your bands: HMRC Dividend Allowance factsheet (published 2015 for the original £5,000 allowance; the amounts and rates in it are out of date, the method is what this calculator uses) — gov.uk/government/publications/dividend-allowance-factsheet.
- Allowances deducted in the way that gives the greatest reduction in tax: Income Tax Act 2007, section 25(2) — legislation.gov.uk/ukpga/2007/3/section/25.
- All sources checked 18 October 2026. Verification: automated tests (
test/uk-dividend.test.js) including the GOV.UK example. - Reviewed: .
Educational estimate only, not personal financial or tax advice. Investments can fall as well as rise and dividends are not guaranteed. Tax rules can change and depend on your circumstances; confirm your position with GOV.UK or HMRC.
Run your own numbers
Enter your portfolio, its yield and your other income, and see what dividend tax a general investment account costs compared with an ISA.
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