Dividend Tax Allowance 2026 — £500 and the Hidden Tax Hit The Dividend Allowance dropped from £2,000 to £1,000 in 2023, then to £500 for the 2024–25 tax year and remains £500 for 2025–26. For investors holding dividend-paying stocks outside an ISA, this matters more each year. How It Works Dividends earned outside an ISA …