Dividend income timing (UK income tax)
The income-tax charge on UK dividends generally applies to the amount paid in the tax year. Declaring a dividend and paying it are distinct events: actual payment and the company’s arrangements must be considered, including where an interim dividend is credited unconditionally to a shareholder’s account. ISA dividends and other special arrangements require separate consideration.
Worked example
A UK company declares an interim dividend on 28 March 2026 but actually pays it to an individual shareholder on 10 April 2026. Assuming no earlier payment or unconditional credit and no special rule, the dividend is included in the shareholder’s 2026–27 income rather than 2025–26.
Common mistake
Automatically using the declaration date as the income-tax payment date, or treating dividend income within a qualifying ISA as ordinary taxable dividends.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Supporting | June 2026–June 2027 |