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