Income Tax Act 2007 section 8

The dividend nil rate, dividend ordinary rate, dividend upper rate and dividend additional rate

Section 8 sets out the four rates of income tax that apply specifically to dividend income, depending on which tax band the dividend income falls into.

• The dividend nil rate is 0%, applying to dividend income within the dividend allowance.
• The dividend ordinary rate is 8.75%, applying to dividend income falling within the basic rate band.
• The dividend upper rate is 33.75%, applying to dividend income falling within the higher rate band.
• The dividend additional rate is 39.35%, applying to dividend income falling within the additional rate band.