Nick Wright examines how couples can share dividend income from a family company in 2026/27, the conditions that the settlements legislation imposes on transfers between spouses, and the share rights that decide whether the planning survives an HMRC enquiry.
Sharing dividend income between spouses or civil partners rests on a straightforward idea: two personal allowances and two basic rate bands are better than one. For 2026/27, dividends are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% above the additional rate threshold. Each individual has a £500 dividend allowance, which operates as a nil rate band and uses up part of the band in which it falls.
