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IBKR Dividend and Savings Allowances: 2025/26 UK Guide

Updated: 21/10/2026

How much IBKR dividend and interest income is tax-free in 2025/26: the £500 dividend allowance, the personal savings allowance and when to file a return.

For 2024/25 and 2025/26 the first £500 of your dividends is tax-free under the dividend allowance, and interest on your IBKR cash is covered by the personal savings allowance of £1,000 for basic-rate, £500 for higher-rate and nothing for additional-rate taxpayers. Interactive Brokers pays both without deducting UK tax, so anything above those allowances has to be declared to HMRC.

The dividend allowance was £2,000 in 2022/23, £1,000 in 2023/24 and has been £500 since 2024/25. A portfolio that produced no tax at all three years ago can now leave a bill. Above the allowance, dividends are taxed at:

• 8.75% in the basic rate band,
• 33.75% in the higher rate band,
• 39.35% in the additional rate band.

The allowance covers UK and foreign dividends together, so US dividends paid into your IBKR account count towards it in full, at their gross amount before US tax.

IBKR pays interest on qualifying cash balances, usually monthly and often in several currencies. It is savings income, paid without tax deducted. The personal savings allowance covers:

• £1,000 if you are a basic-rate taxpayer,
• £500 if you are a higher-rate taxpayer,
• £0 if you are an additional-rate taxpayer.

If your other income is low, the starting rate for savings can make up to £5,000 of interest tax-free as well. It shrinks by £1 for every £1 of non-savings income above the £12,570 personal allowance, so anyone earning more than £17,570 from work or pensions gets nothing from it.

Interest paid from outside the UK goes on the SA106 foreign pages as overseas savings income. Check where your interest comes from on the annual statement, and use the UK interest box on the main return if it is paid by a UK entity.

Dividends and interest covered by an allowance are taxed at 0%, but they still use up your income tax bands. Your total income, including the dividends and interest themselves, decides whether you are a basic, higher or additional-rate taxpayer. A few thousand pounds of investment income can tip you over £50,270 into the higher rate band, which halves your savings allowance and raises the rate on everything above the line.

A higher-rate taxpayer receives £2,000 of dividends and £1,500 of interest from IBKR:

• Dividends: (£2,000 − £500) × 33.75% = £506.25.
• Interest: (£1,500 − £500) × 40% = £400.
• Total: £906.25.

A basic-rate taxpayer with a £30,000 salary receives £1,200 of dividends and £1,400 of interest. Their total income of £32,600 stays well inside the basic rate band, and the salary rules out the starting rate for savings:

• Dividends: (£1,200 − £500) × 8.75% = £61.25.
• Interest: (£1,400 − £1,000) × 20% = £80.
• Total: £141.25.

1. Add up all dividends for 6 April 2025 to 5 April 2026, gross and converted to sterling on each payment date.
2. Add up all interest for the same period, converted the same way.
3. If dividends are above £10,000, you need a Self Assessment return. Large amounts of untaxed interest also bring you into Self Assessment.
4. If you also sold shares with gains above £3,000, or proceeds above £50,000, you need a return anyway, so put the dividends and interest on it too.
5. If none of that applies but you owe some tax, tell HMRC. Smaller amounts can often be collected through your PAYE tax code instead of a return.

• Assuming income under the allowance can be ignored when working out your tax band.
• Counting US dividends net of the 15% withheld, which makes the total look smaller than it is.
• Forgetting cash interest because it arrives in small monthly amounts across currencies.
• Deducting margin interest you paid. Interest on borrowing to buy shares cannot be set against interest you receive, and it is not an allowable cost for capital gains either.
• Leaving income-producing holdings outside a stocks and shares ISA when your £20,000 annual ISA allowance is unused.

With allowances this small, a portfolio that never used to create a tax bill now often does, and HMRC adds interest to tax paid late. Upload your IBKR statement to Brokers.tax and see every dividend and interest payment converted to sterling, with the totals ready for your return, while there is still time to file without penalties.