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Taxation of dividend income


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns

Taxation of dividend income


Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
tag-icon Tax Returns
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STOP PRESS: The remittance basis is to be abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. The legislation is included in Finance Bill 2025. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

Introduction

A dividend is a distribution of profit by a company to its shareholders.

A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash dividends and Non-cash dividends guidance notes.

For more on dividends from overseas resident companies, see the Foreign dividends guidance note.

Dividend income is taxed at dividend income tax rates, which increased by 1.25 percentage points with effect from 6 April 2022. Note that the tax treatment of dividend income in the hands of UK residents is different

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  • 19 Nov 2024 21:33

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