Calculate Gross Dividend on Shares

Share Dividend Tax Credit

As explained in share taxes, when a UK company pays a dividend, it comes with a tax credit.

This tax credit is 10%.  When you receive a dividend you therefore receive 90% of the dividend.

When doing your tax return, if you are not sure what the tax credit is, you simply divide the dividend you received by 0.9 to work out the gross dividend.

Example: James receives a dividend cheque for XYZABC Limited shares of £257.68.

• This is a net dividend after corporation tax has been paid
• Tax credit = 10%. 
• This means James has received 90% (9/10ths) of the gross dividend.
• Gross Dividend therefore = 10/9 X net dividend.
• Gross Dividend = £257.68 X 10/9
• Gross Dividend = £286.31

Just to double check, multiply the gross dividend £286.31 by 90% to reverse the calculation.

The gross figure is what will be used in your overall tax return calculation (although usually HMRC will ask you for the net figure online).

Request tax advice today.