For 2026/27, if you are non-resident for the whole UK tax year, the UK tax on ordinary dividends from UK companies may be limited to nil. They are "disregarded income" for non-residents, and the UK tax on disregarded income is capped at the tax deducted at source, which for ordinary UK dividends is generally none. No UK tax would generally arise on them under these assumptions, but other UK income, REIT distributions and the country where you now live can change the result.

Why ordinary UK dividends may carry no UK tax for non-residents

When you are non-resident for a full tax year, the UK only taxes your UK-source income, and section 811 of the Income Tax Act 2007 then limits the bill. Your liability cannot be more than:

  • Tax deducted at source from disregarded income, plus
  • Tax on your other UK income, calculated without personal allowances

HMRC's helpsheet HS300 lists dividends from UK companies and income from unit trusts as disregarded income. Because no tax is withheld on ordinary UK dividends, the first part is generally nil.

The broad position is a comparison. Your tax is also calculated normally, with any personal allowance you are entitled to, and you pay the lower figure. This matters if you also have UK rental income or a UK employment pension.

2026/27 dividend rates, for the normal calculation

Where the normal calculation applies, the figures for 2026/27 are:

  • Dividend allowance: £500
  • Basic rate: 10.75%
  • Higher rate: 35.75%
  • Additional rate: 39.35%

The basic and higher rates rose by two percentage points from 6 April 2026. For a non-resident with UK dividends and no other UK income, the limit will often produce a lower bill than these rates would.

REITs and property income distributions

Not every payment from a UK listed company is an ordinary dividend. HMRC's manual treats property income distributions from UK Real Estate Investment Trusts as profits of a UK property business, generally paid under deduction of tax. They are not disregarded income, so the non-resident limit does not remove that tax. A double tax treaty may reduce it. For example, the 2016 UK-UAE convention generally exempts UK dividends paid to UAE residents, but allows the UK to charge up to 15% where dividends are paid out of income from immovable property by certain investment vehicles. A treaty claim generally needs evidence of residence.

Tax in your new country

The UK position is only half the picture.

  • UAE: there is currently no personal income tax on dividends for individuals.
  • Portugal: residents are generally taxed on worldwide income. Dividends are generally taxed at a special 28% rate, or 35% where they come from an entity in a blacklisted jurisdiction, unless you choose to aggregate them with other income. Special regimes may change this.
  • Spain: residents are generally taxed on worldwide savings income, including UK dividends, under Spanish rules, which can vary by region.

Where both countries can tax, the treaty and foreign tax credit rules decide who gives way. Our guide to moving from the UK and the Statutory Residence Test covers how residence is decided, and our guide to tax in Portugal for expats covers the Portuguese side.

Illustrative example

Illustrative example only, not a real client.

Anna is a British citizen, non-resident for all of 2026/27 and living in Abu Dhabi. She receives £40,000 of ordinary dividends from UK shares and £2,000 of REIT property income distributions, from which £400 of UK tax was deducted. Assumptions: no other UK income, entitled to the personal allowance, no treaty claim made.

  • Normal calculation: her £12,570 personal allowance covers the £2,000 REIT income first, leaving £10,570 to set against dividends. That leaves £29,430 of dividends, of which £500 falls in the dividend allowance and £28,930 is taxed at 10.75%, about £3,110.
  • Limited calculation: her ordinary dividends are disregarded income with no tax deducted, so nil. The REIT income is not disregarded, so it is taxed at 20% with no personal allowance, which is £400, matching the tax already withheld.

Under these assumptions her UK liability is capped at £400. Whether any of that can be reclaimed under the UK-UAE treaty is a separate question.

When the year of departure is different

The limit only applies if you are non-resident for the whole tax year; it does not apply in the overseas part of a split year. A large dividend from your own company paid around the time you leave may also be caught by the temporary non-residence rules if you return within five years.

Common mistakes

  • Assuming all UK listed company payments are ordinary dividends.
  • Forgetting that the new country may tax the dividends.
  • Taking a large dividend from your own company around departure without checking split year and temporary non-residence rules.
  • Applying the limit in a split year.

Talk it through

Where you hold your shares, and in what structure, can affect both your income tax and your estate. A regulated financial adviser can help. Get in touch for a free introduction.

Sources and further reading

Last reviewed: October 2026. Tax year: 2026/27 (UK); 2026 (Portugal, Spain). Jurisdictions covered: UK, UAE, Portugal, Spain. Rates, legislation and guidance change, so recheck before relying on this. Rules can differ between England and Wales, Scotland and Northern Ireland; tax residence is fact-specific; treaty outcomes depend on residence, domicile or nationality provisions; examples are simplified and omit reliefs, costs, exchange rates and anti-avoidance rules. This is general information, not financial, tax or legal advice. Take advice in the relevant country before acting.