You may get a dividend payment if you own shares in a company.
From 6 April 2016, you won’t pay tax on the first £5,000 of dividends that you get in the tax year. This is from 6 April to 5 April the following year.
Above this allowance the tax you pay depends on which Income Tax bandyou’re in. Include all income from dividends to your other taxable incomewhen working this out. You may pay tax at more than one rate.
|Tax Band||Tax rate on dividends over £5,000|
|Basic rate (and non-taxpayers)||7.5%|
HM Revenue and Customs (HMRC) has examples of how your tax is worked out if you’re over the dividend allowance.