In April, the Government introduced a new Dividend Allowance. Under this allowance, you do not have to pay tax on any income you receive from dividends up to £5,000 a year.
This means if you only receive dividend income from Royal Mail Free Shares you hold, you won’t have to pay tax on any dividends you may receive on these shares.
For any dividend income you receive over the £5,000 allowance, the following rates apply:
- 7.5% on dividend income for basic rate taxpayers
32.5% on dividend income for higher rate taxpayers
38.1% on dividend income for additional rate taxpayers