Ndubuisi 'Andy' EgwimMoney Coach for Medics|Ex-NHS GP|21+ Yrs Investor| Founder, MoneyWiseDoctor.com|Helping Medics Avoid Big Money Mistakes

ISA & Dividend Tax_ Don't Miss This Doctor's Tax Hack!

10 May 2026 · 1 min

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In this segment, Ndubuisi 'Andy' Egwim explains that dividends held inside an ISA are completely tax‑free, which is especially important for doctors who receive income as dividends through their limited companies (e.g., locums, private practice, portfolio GPs). He warns that dividends taken outside a tax‑free wrapper will be subject to the new higher personal dividend tax rates that will apply from April 2027. He also outlines two broader tax changes slated for April 2027: the basic rate of tax on interest will rise from 20% to 22% and the higher rate from 40% to 42%, and the cash ISA annual contribution limit for those under 65 will fall from £20,000 to £12,000. This tax year is the last opportunity to contribute the full £20k to a cash ISA, so he urges viewers to maximise their contributions now.

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Inside an ISA, how much do you have to pay in dividend tax? Zero, zero, nothing. This point is particularly relevant for doctors operating through a limited company, locums, private practice, portfolio GPs especially, because if you draw income from your company as a dividend, those new rates apply to you, okay? And they apply to you at the personal level. So investment dividends sitting outside the tax wrapper on top of that just compound the problem further, so you'll be paying more tax. Number 3, the third reason why you pay attention to this question is April next year, 2027, there are two more changes. Saving tax rises. The basic rate will go from 20% to 22%. The higher rate will go from 40% to 42% on interest in outside tax wrappers. And the cash ISA limit is dropping to £12K if you are less than 65. So you will only be able to put £12,000 in a cash ISA per tax year instead of £20K. Now this tax year is the last year at the full £20K limit that you can put in a cash ISA. You can fund it to the max.