Category: Expat Tax

New Section 530A basically allows new accounts that operate much like a traditional IRA only they are for kids under age 18 and have restrictions on what they can invest in. Up to $5,000 can be contributed to the account annually (this amount is adjusted for inflation starting in 2028) until the year of the child’s 17th birthday. Of this amount, up to $2,500 can be contributed by an employer (per employee per year rather than per employee Trump Account) if the employer creates this employee benefit, written, per guidance to be issued by the IRS. The $2,500 is tax free to the employee (Section 128).

For a baby born in 2025 through 2028, the government will put $1,000 into the account if the baby is a US citizen and has an SSN and the parent or other relative makes the election. This doesn’t count towards the maximum $5,000 contribution per year. The $1,000 is treated as a tax refund so not taxable. 

No distributions are allowed until the year the child turns 18 but the goal is for the child to learn about future value, savings and perhaps a bit about taxes, and let the money continue to grow. The child can start contributing via IRA rules once working and keeping the account. If disciplined, to keep the account and not pull it out for a new car or big party, the account could grow tremendously. For example, parents starting one in 2026 (contributions can’t start until 7/4/26) for their 3-year old child, contributing $5,000 per year until age 17 (15 contributions), assuming a 5% rate of return will have almost $108,000 at that time. If no further contributions, when the child is 60, the balance would be about $837,000.

1. Add a provision similar to Section 529(c)(2)(A)(i) that contributions to the account on behalf of any designated beneficiary is treated as a completed gift to that beneficiary which is NOT a future interest in property to make it clear that the gift can be exempt from reporting and gift tax under the $19,000 annual gift exclusion.

2. Encourage contributions and people not forgetting about the accounts by allowing tax refunds to be directed to the account(s).

3. Rather than have parents or someone elect to set up an account for an eligible baby born in 2025 through 2028, set it up automatically when the parents apply for an SSN for the baby, and sent information to the parents about the account and encourage them to continue to add funds as they can and set them up for eligible siblings too if possible.

4. Add more than a 10% withdrawal penalty to discourage 18-year-olds from emptying the account at age 18 or soon thereafter.  Provide an incentive to encourage them to convert the account to a traditional IRA and continue making contributions; the incentive might be another $1,000 into the account at age 21.

5. Encourage states to conform to the OBBBA Trump Account provisions to simplify tracking basis in the account and for conformity on annual tax effects.

6. Require trustees to make contact with beneficiaries (and parents until beneficiaries turn 18) because it is possible beneficiaries will forget about the account and the trustee will end up sending it to the state as unclaimed property at some point in the future. This regular contact would ideally include some financial literacy tips.

What do you think?

Many UK taxpayers wonder what can you do with the HMRC app. The free app runs on both iPhone and Android devices. It has grown from a basic information tool into a practical platform for personal tax tasks.

Knowing what can you do with the HMRC app could save you a long wait on hold to HMRC. The app consistently ranks in the top five finance apps on both the App Store and Google Play.

Since its launch, the app has been downloaded by more than seven million people across the UK.

HMRC estimates that millions of phone calls each year could be avoided by using the app instead. That figure points to just how broad what can you do with the HMRC app actually is.

If you have never used it before, you may be surprised by what can you do with the HMRC app today.

From checking your tax code to finding your National Insurance number, it covers a wide range of personal tax tasks.

This article explains what can you do with the HMRC app — including its limitations — so you can judge whether it belongs on your phone.

What Can You Do With the HMRC App to Check Your Tax Code?

Your tax code tells HMRC how much Income Tax to deduct from your pay. If it is wrong, you could end up paying too much — or too little.

The app lets you view your current tax code instantly after signing in. You can also see a breakdown of why that code has been applied.

This means you can spot potential errors before they affect your take-home pay. The app displays the income and deductions HMRC holds on your record.

If something looks incorrect, you can contact HMRC directly through the app to raise a query. Checking your tax code is one of the most common reasons people log in each month.

HMRC app features around tax code visibility are available to all users who sign in with a Government Gateway account. The process takes seconds and requires no phone calls.

Where to Download the HMRC App

The HMRC app download is free and takes just a few moments. iPhone users can find it on the App Store and Android users on Google Play — search for “HMRC” and look for the official app from HM Revenue & Customs.

The first time you sign in, you will need your Government Gateway user ID and password. After that, you can set up a six-digit PIN, fingerprint, or facial recognition for quicker access.

If you do not already have a Government Gateway account, you can create one during the sign-in process.

Viewing Your Employment History and Pay Information

The app displays your income and HMRC app employment history going back up to five tax years. This is particularly useful if you are changing jobs or applying for a mortgage.

Each entry shows the employer name, the dates of employment, and the income recorded by HMRC. You can use this information to cross-check what appears on your payslips.

Discrepancies between your records and HMRC’s data can sometimes point to a tax code problem. Spotting these early may help you avoid unexpected tax bills later in the year.

The employment history function sits within the personal tax summary section of the app. It is one of the most straightforward areas to navigate and requires no specialist knowledge to interpret.

HMRC App National Insurance Number: Finding and Saving It

Your National Insurance number (NINO) is one of the most frequently requested pieces of personal information.

The HMRC app national insurance number feature lets you find it instantly without searching through old letters.

Once located, you can save it directly to your Apple Wallet or Google Wallet for quick access. You can also print it or share it when needed.

HMRC receives a substantial volume of calls each year from people who simply need their NI number. Accessing it through the app takes a matter of seconds.

The app also lets you view your National Insurance contribution record. This allows you to see whether there are any gaps — which may be relevant to your future State Pension entitlement.

Checking for NI gaps is a straightforward task through the app. If gaps exist, GOV.UK provides further guidance on whether you may be able to fill them.

Checking and Claiming a Tax Refund

One of the more valuable HMRC app features is the ability to check whether you have overpaid tax. The app shows whether a refund may be owed to you based on HMRC’s records.

This HMRC app tax refund process is straightforward and does not require a phone call. If a refund appears to be due, you can submit your claim directly through the app.

In many cases, payment can be made to your bank account rather than by cheque. You can also track the progress of your refund request from within the app.

Keep in mind that whether a refund is owed depends on your personal tax position for the relevant tax year. Outcomes can vary, and the app will reflect the information HMRC holds at that point in time.

If you believe a refund is owed but the app does not show one, it may be worth checking whether your tax code or employment records are correct first.

HMRC App Self Assessment Payments and Reminders

For those who file a Self Assessment tax return, the HMRC app self assessment functions include viewing how much tax you owe. You can make payments directly using open banking from within the app.

You can also add deadline reminders to your calendar. This is helpful for avoiding the automatic £100 penalty that applies if you miss the 31 January filing deadline.

The app lets you view your Unique Taxpayer Reference (UTR), which you need when filing a return. Around 340,000 people paid their Self Assessment bill via the app between April and early January 2025/26.

That figure represents a rise of around 65% compared to the same period the previous year. It reflects how many people are finding the payment process simpler through the app than through other channels.

Note that you cannot file your actual Self Assessment return through the app itself. Submitting the return requires the full HMRC online service or compatible software.

HMRC App State Pension Forecast and Child Benefit

The HMRC app state pension forecast feature shows an estimate of how much State Pension you could receive. It also shows when you are likely to become eligible to start receiving it.

You can check whether you have gaps in your National Insurance record that might reduce that forecast. The app does not allow you to make voluntary NI contributions directly — you would use GOV.UK for that step.

HMRC app child benefit features allow you to claim Child Benefit, manage your payments, and update your details. You can notify HMRC if your child stays in full-time approved education or training after age 16.

The app sends push notifications once a Child Benefit claim has been submitted, which provides a useful record. The digital claims process typically takes around ten minutes to complete.

Managing Child Benefit through the app avoids the need to complete paper forms. Changes to your circumstances can also be reported directly through the app without contacting HMRC by phone.

HMRC App vs Personal Tax Account

It is worth understanding the HMRC app vs personal tax account distinction. Both use the same Government Gateway login and draw on the same underlying personal tax data.

The Personal Tax Account is the full browser-based service, accessible on any device via GOV.UK. The app is a mobile-optimised version of many of those same services.

However, the Personal Tax Account tends to offer a wider range of functions for certain tasks. Filing a Self Assessment return or making specific changes to your tax record is done through the full online service, not the app.

Think of the app as a convenient everyday tool for checking and paying. Think of the Personal Tax Account as the fuller version for actions that need more detail or involve complex changes.

The HMRC app government gateway login is the same credential used for both. Setting it up once gives you access to both the app and the full online account.

What Can You Do With the HMRC App — and What It Can’t

Knowing what can you do with the HMRC app also means understanding where it stops.

• Business taxes — including VAT, Corporation Tax, and PAYE for employers — cannot be accessed through the app.

These require the Business Tax Account, available via GOV.UK. The app is designed for personal tax management only.

• The app does not allow you to file a Self Assessment return, although it supports payments and reminders. Submitting a return requires the full HMRC online service or compatible accounting software.

Some users report HMRC app problems with signing in, particularly if their Government Gateway account has not been fully verified. If you face login issues, the app’s settings screen contains support information.

You can send that support information to [email protected] for assistance. Most sign-in issues relate to identity verification rather than the app itself.

The app works alongside the Personal Tax Account, not as a replacement for it. Used together, they cover most personal tax tasks without the need to call HMRC.

Summing up

The HMRC app is a practical, free tool for managing personal tax tasks from your phone.

It covers a wide range of functions — from checking your tax code and finding your NI number to making Self Assessment payments and viewing your State Pension forecast.

It does not replace the full Personal Tax Account or allow you to file a tax return, but it handles many everyday queries quickly and securely.

For most people, it is worth downloading and setting up even if you only use it occasionally.

Checking your tax code or finding your NI number may take seconds rather than requiring a phone call to HMRC. For further information on tax refunds and what you may be owed, visit our

For further information on tax refunds and what you may be owed, visit our tax rebate guides.

Key Takeaways For Managing Your Tax Online

• The HMRC app is free to download on the App Store and Google Play for both iPhone and Android devices.
• You can use it to check your tax code, view your employment history, and find your National Insurance number.
• The app lets you check whether a tax refund may be owed and submit a claim directly if one appears to be due.
• Self Assessment users can view how much they owe, make payments via open banking, and set deadline reminders.
• Business taxes, filing a Self Assessment return, and certain detailed changes require the full HMRC online service rather than the app.
• The app and the Personal Tax Account use the same Government Gateway login and work best when used together.

HMRC App FAQs

Q1 HMRC app download: How do I download the HMRC app?

A: The HMRC app is free to download from the App Store for iPhone users and Google Play for Android users. Search for “HMRC” and look for the official app from HM Revenue & Customs. You will need a Government Gateway account to sign in when you first open it. If you do not have one, you can set one up during the sign-in process.

Q2 HMRC app check tax code: Can I check my tax code on the HMRC app?

A: Yes. Once signed in, the app displays your current tax code and a summary of the income and deductions HMRC holds on record. This lets you identify potential errors before they affect your pay. If your tax code looks incorrect, you can raise a query through the app or by contacting HMRC directly.

Q3 HMRC app self assessment: Can I pay my Self Assessment bill through the HMRC app?

A: Yes. The app lets you view how much Self Assessment tax you owe and make a payment using open banking. You can also set reminders for the 31 January filing and payment deadline. Note that you cannot file your actual Self Assessment return through the app — that requires the full HMRC online service or compatible software.

Q4 HMRC app government gateway: Do I need a Government Gateway account to use the HMRC app?

A: Yes. The app requires a Government Gateway user ID and password the first time you sign in. After that, you can set up a six-digit PIN, fingerprint, or facial recognition for quicker access. If you do not already have a Government Gateway account, you can create one during the sign-in process.

Q5 HMRC app what it can’t do: What can’t you do with the HMRC app?

A: The HMRC app does not support business taxes such as VAT, Corporation Tax, or PAYE for employers — these are managed through the Business Tax Account on GOV.UK. You also cannot file a Self Assessment return through the app. For those tasks, you would use the full HMRC online service.

This blog post is based on Asprey and the Taxation of Wealth: Where to Next? by Chris Evans, Rick Krever, and Peter Mellor.

In the face of growing wealth inequality between and within nations, attention in almost all developed economies has turned to the possible use of wealth or wealth transfer taxation to ameliorate the divide. Fifty years after Australia started to dismantle its robust gift and estate tax regime, and 73 years after the Commonwealth ended its principal wealth tax system, many are wondering whether it is time to reconsider the need for wealth or wealth transfer taxes in this country.

A Forgotten History of Wealth Taxation

Ironically, Australia was once a leader in wealth and wealth transfer taxes. Prior to Federation, all Australian states imposed wealth transfer taxes as well as full or partial income taxes, and most had imposed land taxes—imposts that remained in place after 1901. And less than a decade after Federation, the new Commonwealth government adopted a wealth tax based on landholdings intended to break up large landed estates. This was followed a few years later by a Commonwealth estates tax intended, in part, to reduce large parcels of wealth transferred at death, and later matched by a gift tax aimed at transfers of wealth prior to death.

The Federal Land Tax lasted just over 40 years.  The wealth transfer taxes lasted just a little longer. Beginning in 1976 with Queensland, the states and federal governments abolished their taxes on wealth transfers at death and by gift prior to death. This left transfers of wealth entirely outside the tax system, apart from a very limited number of stamp duties imposed on some transfers of property and some state land taxes.

At the same time, a very weak income tax actively encouraged a skewed acquisition of wealth. It imposed high tax rates on labour income of the aspiring classes while entirely exempting the main form of income derived by the very rich: gains realised on the sale of investments.

The Capital Gains Concession and the Power of Deferral

The bias of the income tax system in favour of wealth accumulation by the country’s wealthiest was mitigated slightly in 1973, when gains from short-term investments were added to the income tax base. However, it was not until 1986 (with effect from September 1985) that gains from long-term investments were made subject to income tax.

The measure was applied for 15 years until its impact was dramatically reduced from September 1999 under changes to the income tax introduced by the Howard government. John Howard had strongly opposed the inclusion of investment gains in the income tax initially, and his 1999 changes introduced an exemption from income tax for half of investment gains realised on assets held for at least 12 months.

The concessional half-exemption of investment gains from income taxation was compounded by a further concession that allowed investors to defer paying tax on their gains by simply electing where their wealth should be invested. Ordinary businesses and workers pay tax annually on their gains. Investors may also enjoy annual gains on the value of their investments, but each year make an evaluation—known as portfolio choice—deciding whether the assets they own are likely to rise in value at the same rate or a greater rate than alternative investments, and consequently whether they should retain their wealth in existing investments.

If they decide to change investments, they are said to have “realised” their gains, and the non-exempt half of those gains is subject to income tax. However, if they make the choice to keep their wealth invested in the same assets for another year, recognition of the gains accrued during the year is deferred until the assets are sold.

The Political Hurdle of “Death Taxes”

The prospects for tax reform based on the taxation of wealth or wealth transfers are dismal at best. Apologists for the wealthy have run a remarkably effective campaign equating wealth transfer taxation with unjust appropriation by the government of private property. They have created the widely accepted illusion that wealth taxes—and in particular, death taxes—will hit working- and middle-class families hard.

Labelling a tax, including any aspect of the income tax, as a “death tax” is a strategy almost certain to guarantee its demise. The reality may be far different: modern wealth and wealth transfer taxes are usually designed to apply only to the ultra-rich and can easily utilize tapering thresholds to keep all but the very rich out of the system. Still, perceptions matter, and energy spent on reviving wealth or wealth transfer taxes is unlikely to yield tangible results.

A Blueprint for Reform: Lessons from Superannuation

There may be a more viable path to reforming the income tax on wealth accumulation, however, as illustrated by the government’s recent reform of superannuation taxation.

From the outset of federal income taxation in Australia in 1915, income put aside for retirement savings has been concessionally taxed. The concession was adopted to encourage workers to save for retirement when it was feared young workers, in particular, might be too myopic to realise they need to put some income aside for their retirement years. This rationale disappeared once Australia adopted a compulsory retirement savings system, but the concession—a lower tax rate on income contributed to a superannuation fund and on gains realised on a fund’s investments—remained in place.

Unsurprisingly, the concessional tax regime for retirement savings was fully exploited by very wealthy taxpayers who held significant parts of their investment portfolios in their superannuation funds, where gains were taxed at reduced rates. When the exploitation of this tax concession rose to unsustainable levels, the government finally moved to reduce it. They first attempted to do this by increasing the concessional rate on excessive savings in superannuation funds, and secondly by removing the portfolio choice option. Consequently, had the reforms been adopted as originally presented, gains would be taxed on an annual basis, regardless of whether investments remained in the same assets at the end of the year or had been realised and shifted to other investment assets. The Government found a number of compromises were needed to secure support for its proposals in Parliament, including a retreat from the annual recognition of gains whether assets had been sold or retained. The law, as originally drafted, however, provides model legislation for a system that taxes gains as they arise, removing the option to defer tax until a later time when assets are sold.

Extending the Logic to Broad Investment Gains

While investments in their superannuation funds are an important part of the total investment portfolio of the very wealthy, they constitute an ever-diminishing share of total investments as income rises. A broader reform of the taxation of investment gains is needed if Australia wishes to address the nation’s growing inequality.

The proposals for reform of the superannuation taxation regime and changes to the proposals as the reform measures progressed through Parliament provided two important lessons for those seeking reform of wealth taxation. From a law design perspective, the initial proposals showed that it is technically not difficult to tax investment gains as they accrue, regardless of a taxpayer’s portfolio choice to sell or retain appreciated investments. Second, the superannuation reform that was enacted, higher tax rates for gains realised by wealthier taxpayers on very large balances in concessionally taxed funds, illustrated how the political case for reform can be made if it is presented in a convincing fashion.

A starting point might be for the government to show how the benefit of the deferral of tax now enjoyed by investors accrues primarily to the small percentage of Australians in the wealthiest slices of society.

Dividend tax rates 2026/27 have changed, and you may already be paying more as a result.

The dividend tax rates 2026/27 rose on 6 April 2026, for the first time since 2022. The basic rate increased from 8.75% to 10.75%, and the higher rate rose from 33.75% to 35.75%.

The dividend tax rates 2026/27 directly affect your take-home income. Working out how much dividend tax you may pay in 2026 matters.

Your liability under the new dividend tax rates 2026/27 is only one part of the picture, though. New HMRC reporting requirements also apply, and they catch many directors off guard.

This article covers the dividend tax rates 2026/27 and what they mean in cash terms. It explains how to report dividend income to HMRC and what directors must now disclose on their return.

These requirements apply even when no dividend tax is due. Understanding the new rates and what they mean for your tax position is important.

So too is knowing the new reporting rules, the new director disclosure obligations, and staying fully compliant.

Dividend Tax Rates 2026/27: What Has Changed

The new rates came into force on 6 April 2026, as confirmed at the Autumn Budget 2025.

• The dividend tax basic rate rose by 2 percentage points to 10.75%.
• The higher rate rose by the same amount to 35.75%.

Both changes apply to income in the respective bands: £12,571–£50,270 for basic rate, and £50,271–£125,140 for higher rate.

• The additional rate, for income above £125,140, remains unchanged at 39.35%.
• The dividend allowance 2026/27 also stays at £500 — the first £500 of dividend income is taxed at 0%.

That £500 still counts towards your total income when HMRC determines your band. The April 2026 dividend tax increase therefore affects all taxpayers receiving dividends above that threshold.

For Scottish taxpayers: dividend tax in Scotland 2026 follows the UK-wide rates. Scotland sets its own rates for employment income, but dividend tax rates are the same across the whole country.

GOV.UK has published the full legislative detail in the income tax changes document published in November 2025. The impact of the changes falls entirely on basic and higher rate taxpayers.

How Much More Could You Actually Pay?

The three examples below show the cash impact of the dividend tax rates 2026/27 in real terms.

All use the 2026/27 thresholds: personal allowance £12,570, basic rate band up to £50,270.

These figures are estimates and your own position may differ; individual tax circumstances vary significantly.

Example A — Basic rate director

Salary £12,570 and dividends £37,430 give total income of £50,000. The salary uses the personal allowance in full, so all dividends fall in the basic rate band.

After the £500 allowance, £36,930 is taxable. At 8.75% in 2025/26, the bill was approximately £3,231. At 10.75% in 2026/27, it rises to approximately £3,970 — around £739 more per year.

Example B — Higher rate director

Salary £12,570 and dividends £75,000 give total income of £87,570. After the personal allowance, £37,700 of dividends falls in the basic rate band and £37,300 in the higher rate band.

Estimated tax in 2025/26 was around £15,803. Under the dividend tax rates 2026/27, that rises to approximately £17,329 — around £1,526 more per year.

Example C — Investor with no other income

This example covers dividend tax if no other income applies. A shareholder with no salary and £20,000 in dividends sees the personal allowance cover the first £12,570.

The remaining £7,430 falls in the basic rate band. After the £500 allowance, £6,930 is taxable: £606 in 2025/26 and £745 in 2026/27 — around £139 more per year.

Who Needs to Report Dividend Income to HMRC

Under the dividend tax rates 2026/27, reporting dividend income to HMRC depends on the amount received. It also depends on whether you already file a Self Assessment return.

Three routes apply, and using the wrong one can result in penalties.

Within the allowance — no action usually required

If total dividend income is £500 or less, no reporting action is needed. That said, close company directors face a separate disclosure requirement regardless of the amount — covered in the next section.

Up to £10,000 — notify HMRC or adjust your tax code

This route covers dividend tax if not in Self Assessment already. If dividend income exceeds £500 but is no more than £10,000, notify HMRC directly.

If you are employed or receive a pension, HMRC may adjust your tax code to collect tax through your pay. Use the Income Tax helpline or your Personal Tax Account online.

The key date is 5 October following the end of the tax year. For 2025/26 dividend income, that deadline is 5 October 2026.

Over £10,000 — Self Assessment required

Do I need to do Self Assessment for dividends above £10,000? Yes — it is mandatory, even if you would not otherwise file a return.

Not yet registered for Self Assessment? Apply to HMRC by 5 October 2026 for the 2025/26 tax year.

Most limited company directors already file a Self Assessment return. Taking dividends from your own company is a standard HMRC filing trigger. The question is usually about completing the new close company fields correctly.

What Directors Must Now Include on Their Self Assessment Return

From 6 April 2025, new reporting requirements apply to directors of close companies. The new close company dividend reporting rules for 2025/26 come from the Income Tax (Additional Information in Returns) Regulations 2025.

These rules introduced mandatory fields on the Self Assessment return for 2025/26 and all future years. A close company is broadly a UK limited company controlled by five or fewer participators.

It also covers a company controlled by any number of participator-directors. In practice, this covers most owner-managed businesses in the UK, and around 900,000 directors are thought to be affected.

Previously, a director declared total dividends as a single figure. There was no requirement to separate income from your own company from external shareholdings.

From 2025/26, those two sources must be reported separately. Under the dividend tax rates 2026/27 regime, close company directors must include the following on their return:

• The name of the close company and its Companies House registration number.
• The dividend income received from that company during the year — even if the figure is zero.
• The highest percentage of share capital held at any point during the tax year.
• A mandatory confirmation of director status — previously this question was optional on the return.

This is the point many close company directors miss when reviewing their obligations. The disclosure applies even when dividend income is zero or within the £500 allowance.

The allowance may exempt you from paying tax, but it does not exempt you from this new disclosure.

Under the Finance Act 2024, HMRC may charge £60 per missing item from the 2025/26 returns onwards.

Why Frozen Thresholds Make the Dividend Tax Rates 2026/27 Worse

The dividend tax rates 2026/27 do not operate in isolation. Frozen thresholds and dividends fiscal drag are compounding the impact.

Income tax thresholds are frozen until April 2031. These cover the personal allowance, the basic rate limit, and the higher rate threshold. The Autumn Budget 2025 confirmed this, extending a freeze in place since April 2022.

As salaries and profits rise with inflation, more income crosses into higher bands. That happens even when there has been no real-terms earnings increase — the defining feature of fiscal drag.

A director comfortably within the basic rate band a few years ago may now find some dividends taxed at 35.75%. The thresholds have not moved; the income has.

It remains at £12,570, costing a basic rate taxpayer roughly £581 per year in additional tax. The dividend rate increase comes on top of that.

A director near the £50,270 boundary may now find modest dividends straddling two bands.

Taken together, fiscal drag and the dividend tax rates 2026/27 rise can exceed 2 real-terms percentage points for some directors.

Four Ways to Reduce Your Dividend Tax Legally in 2026

Several legitimate strategies are available to reduce the impact of the dividend tax rates 2026/27 legally. Each depends on your individual position and merits careful thought before acting.

Use your ISA allowance

Dividends inside a Stocks and Shares ISA are free from dividend tax, regardless of the new rates. The annual ISA allowance is £20,000 per person. Moving shares into an ISA wrapper could meaningfully reduce your exposure over time.

Make pension contributions

Pension contributions made by a company director reduce your adjusted net income. A pension contribution can pull dividends from the higher rate band into the basic rate band.

This is worth considering if your income sits near £50,270.

The saving on that shift is 25 percentage points — from 35.75% down to 10.75%. A financial adviser can help you model the right contribution level for your circumstances.

Allocate shares to a spouse or civil partner

This must reflect a genuine transfer of ownership with proper legal documentation. HMRC scrutinises arrangements designed primarily for tax advantage.

Time your dividend declarations

Dividends are taxed in the year they are declared, not when they are received. A dividend declared on 5 April 2026 falls in 2025/26 at the lower rates. One declared on 6 April 2026 falls in 2026/27 at the higher rates.

Where you have genuine flexibility, aligning planned declarations with a lower-income year may reduce the rate that applies.

Salary vs Dividends in 2026: Does the Structure Still Work?

Dividends are not subject to National Insurance contributions, whereas salary above the primary threshold attracts both employee and employer NI.

That fundamental structural advantage has not changed with the 2026/27 rate increases. The dividend tax rates 2026/27 have narrowed the margin, however.

A basic rate director now pays 10.75% on dividend income above the allowance under the dividend tax rates 2026/27.

That compares with 8.75% the previous year, and the gap between salary and dividend tax efficiency has narrowed.

The calculation now depends more heavily on your corporation tax position. A company paying 25% corporation tax faces a combined effective rate that deserves careful modelling.

Relying on dividends simply being ‘lower rate’ is no longer sufficient for accurate planning. For directors earning above the basic rate threshold, the salary-dividend split merits a fresh review each year.

The salary-dividend structure can still work well for most directors. The case for it simply needs to be made on current numbers, not on assumptions from several years ago.

What to Check Before Filing Your 2025/26 Return

Before you file your 2025/26 return, work through three areas. First, confirm which dividend tax rates 2026/27 apply to your income band.

Check whether any of the four dividend tax-reduction strategies above are worth acting on given the dividend tax rates 2026/27.

Second, if you are a close company director, gather your Companies House registration number and your highest shareholding percentage. Prepare a breakdown of dividends from your own company versus any other sources.

Third, confirm your reporting route for 2025/26 dividend income. Dividends above £10,000 require Self Assessment registration by 5 October 2026.

Amounts between £500 and £10,000 should be notified to HMRC or adjusted via tax code by that date.

Reviewing your income structure at the start of the tax year gives you more options than leaving it to January.

Summing up: dividend tax rates 2026/27 and what they mean for you

The increases that took effect on 6 April 2026 are the most significant changes to dividend taxation in several years.

Basic rate taxpayers now pay 10.75% and higher rate taxpayers pay 35.75% on income above the £500 allowance.

Frozen thresholds running to April 2031 compound the impact of the new dividend tax rates 2026/27. For some directors, the real-terms increase exceeds the headline 2 percentage points.

The new close company disclosure rules add a separate compliance obligation regardless of whether any dividend tax is due.

For more on UK tax rules and reliefs, visit the tax guides section at taxrebateservices.co.uk.

Key Takeaways: Dividend Tax Rates 2026/27

• From 6 April 2026, the basic rate of dividend tax is 10.75% and the higher rate is 35.75%. Both are 2 percentage points higher than in 2025/26.
• The £500 dividend allowance and the additional rate of 39.35% remain unchanged for 2026/27.
• Income tax thresholds are frozen until April 2031. Fiscal drag may push more of your income into higher bands without any change in real earnings.
• From 6 April 2025, close company directors must report their shareholding percentage, company number, and dividend amount on their return. This is required even when no dividend tax is owed.
• Dividends above £10,000 require a Self Assessment return. Amounts between £500 and £10,000 should be notified to HMRC or adjusted via tax code by 5 October 2026.
• Options to reduce dividend tax legally include ISA contributions, pension contributions, spousal share allocation, and careful timing of declarations.

Dividend Tax Rates for 2026/27 FAQs

What Are the Dividend Tax Rates for 2026/27?

From 6 April 2026, the basic rate of dividend tax is 10.75% and the higher rate is 35.75%. Both are 2 percentage points higher than in 2025/26. The additional rate, for income above £125,140, remains unchanged at 39.35%. The £500 dividend allowance also remains in place.

How Much Dividend Tax Will I Pay in 2026?

If your total income stays within the basic rate band — up to £50,270 — you pay 10.75% on dividend income above the £500 allowance. A director drawing a salary of £12,570 and dividends of £37,430 may pay approximately £3,970 in dividend tax in 2026/27. That is around £739 more than in 2025/26.

Do I Need to Register for Self Assessment Because of Dividends?

If your dividend income for the 2025/26 tax year exceeds £10,000, you must register for Self Assessment by 5 October 2026. For amounts between £500 and £10,000, notify HMRC or request a tax code adjustment before that date. If your dividends are within the £500 allowance and you are not a close company director, no action is typically required.

What Must Close Company Directors Now Report on Their Tax Return?

From 6 April 2025, directors of close companies must report additional information on their Self Assessment return: the company name and Companies House registration number, the amount of dividend income received from that company (even if zero), and the highest percentage shareholding held during the year. This disclosure is mandatory even when no dividend tax is owed. A £60 penalty applies for each missing item under the Finance Act 2024.

How Can I Legally Reduce My Dividend Tax Bill in 2026?

Four approaches may help. Dividends received inside a Stocks and Shares ISA are completely tax-free, and the annual allowance is £20,000. Pension contributions reduce your adjusted net income and could pull dividends from the higher rate band into the basic rate band. Allocating shares to a lower-earning spouse or civil partner may reduce the rate applied to some dividends. Careful timing of dividend declarations — since dividends are taxed in the year declared — may also allow you to align payments with a lower-income year.

Indonesia has committed to achieving carbon neutrality by 2060 and reducing greenhouse gas emissions by 29 percent independently, or up to 41 percent with international support, by 2030. These commitments arise from its ratification of the Paris Agreement and are reflected in national development planning documents, including the 2020–2024 National Medium-Term Development Plan. To operationalise these commitments, Indonesia introduced a carbon tax through the Law on Harmonization of Tax Regulations. The tax reflects the “polluter pays” principle, whereby entities responsible for emissions bear the environmental cost of their activities.

In my paper “Managing International Carbon Trading through Collaborative Governance (Indonesian context)”,  I outline the measures the Indonesian government can take to engage in international carbon trading, and the benefits derived from these global transactions. Carbon pricing mechanisms, including taxes and emissions trading systems (ETS), are recognised globally as effective tools to reduce emissions while promoting economic efficiency. The Indonesian Financial Services Authority (OJK) officially launched IDX Carbon on the 26th September 2023, marking Indonesia’s entry into structured carbon markets by enabling the trading of carbon emission allowances and carbon credits. By July 2024 – 9 months later – average carbon prices reached IDR 51,580 per ton CO₂e, well above the domestic carbon tax benchmark of IDR 30,000 per ton.

This price differential signals both opportunity and risk. If Indonesian carbon credits become internationally certified, surplus emission reductions may be traded abroad under Article 6 of the Paris Agreement. However, without regulatory safeguards, large-scale exports could undermine domestic emission targets. My paper therefore explores two main questions:

1. How can fiscal instruments regulate international carbon trading?
2. How can collaborative governance ensure effective monitoring of such transactions?

Regarding the former, the Indonesian government could apply export duties to carbon credits to regulate international carbon trading.  This would serve the dual purpose of generating state revenue and regulating export volumes of carbon credits to protect domestic emission targets.

Scenario analysis

Conducting a qualitative descriptive approach, I simulate two scenarios in which Indonesia exports surplus emissions. Between 2019 and 2023, Indonesia’s energy sector consistently recorded surplus emission reductions, reaching 11.67 million tons CO₂e in 2023. If internationally certified, these surplus units could potentially be exported.

The first scenario uses the carbon tax benchmark of 30,000 IDR/ton ($2.50 aud/ton), whereas the second takes the market price of $51,580/ton ($4.33 aud/ton).

	Carbon Price = 30,000 IDR/ton (benchmark)	Carbon Price = 51,580 IDR/ton (market price)
Total export value	350.1 billion	601.9 billion
Income tax (PPh) Article 22 (1.5%)	5.25 billion	9.03 billion
Export duty (7.5%)	26.65 billion	45.82 billion
Potential revenue	39.9 billion (3.35 million aud)	54.85 billion (4.6 million aud)

 

These simulations demonstrate that international carbon trading may contribute significantly to state revenue. However, export regulation must ensure that domestic Nationally Determined Contribution (NDC) targets remain prioritised.

To effectively monitor exports of carbon credits, multiple agencies must collaborate and utilise an integrated data system. Important data inputs include carbon unit sales, export declarations, tax payments, carbon quota allocations, and sustainability reports. Relevant agencies include: IDX Carbon platform, Financial Services Authority (OJK), Ministry of Environment and Forestry (KLHK), Directorate General of Taxes (DJP), and the Directorate General of Customs and Excise (DJBC). Joint supervision by these agencies would prevent double reporting, ensure proper levy collection, and maintain compliance with emission caps.

Indonesia’s participation in international carbon markets presents both environmental and fiscal opportunities. Export duties and PPh Article 22 can function as regulatory safeguards while generating revenue. Revenue simulations indicate potential fiscal gains of approximately IDR 40–55 billion based on current surplus levels.

However, international carbon trading must be governed through collaborative institutional frameworks. Integrated monitoring systems are essential to ensure transparency, prevent regulatory gaps, and safeguard national emission reduction commitments.

 

Note

This study relies on qualitative analysis and surplus data limited to the energy sector. Carbon prices are volatile, and Indonesia has yet to establish comprehensive regulations for international carbon trading. Future research may employ quantitative modelling across multiple sectors and assess macroeconomic impacts.