Dividends from 6 April 2026
The ordinary and upper rates of dividend tax each rose by two percentage points from 6 April 2026:
| Basic rate taxpayers | 10.75% |
|---|---|
| Higher rate taxpayers | 35.75% |
| Additional rate taxpayers | 39.35% (unchanged) |
| Dividend allowance | £500 |
For owner-managed companies, this changes the balance between salary, dividends, pension contributions and retaining profits in the company. It is worth revisiting how you pay yourself.
Property income from April 2027
From the 2027–28 tax year, property income will be taxed at its own rates: 22% basic, 42% higher and 47% additional. Relief for finance costs, such as mortgage interest, which individual landlords receive as a tax reduction, will be given at 22%. Savings income moves to the same rates. Scotland and Wales set their own property income rates.
What to review
- Directors: the mix of salary and dividends, pension contributions and the timing of dividends.
- Landlords: the effect on after-tax income from 2027–28, ownership structure, and whether allowances such as the £1,000 property allowance or Rent a Room relief apply.
- Everyone: whether Making Tax Digital for Income Tax will apply to you, since property turnover counts towards the threshold.
Changing how property is owned can have Capital Gains Tax and Stamp Duty Land Tax consequences, so take advice before moving anything. See property and Capital Gains Tax.
Sources
- Tax on dividends
- Changes to tax rates for property, savings and dividend income
- Tax relief for residential landlords: how it’s worked out
- Tax-free allowances on property and trading income
This article is general guidance and not advice for your circumstances.
