Lesson 4.3 · 3 of 5 · Dividends in depth
Ex-dividend date and payment date: when you need to own the shares
You only get the dividend if you bought the shares before the ex-dividend date. With T+1 settlement the ex-dividend date is the record date itself; with T+2 it is one business day earlier. Settlement is T+1 (since 28 May 2024) in the US, T+2 (T+1 planned from 11 October 2027) in the UK and T+2 (T+1 from 11 October 2027) in the EU. On the ex-date the share price falls, in theory, by the dividend.
Terms in this lesson
- Ex-dividend date
- The first day on which a buyer of the stock no longer gets the next dividend.
- Settlement (T+1, T+2)
- How many business days it takes for the shares to reach the buyer and the money the seller.
- Dividend
- The part of its profit a company pays to shareholders, in cash.
The four dates of a dividend
Definition
What does each date mean?
Declaration, ex-dividend date, record date and payment date.
A real example, Apple: on 30 October 2025 it declared a dividend of $0.26 a share for shareholders of record on 10 November, payable on 13 November. The ex-dividend date was also 10 November.
- Declarationthe board announces the amount and the dates
- Ex-dividend datefrom this day on, buyers no longer get the dividend
- Record datethe list of shareholders who will be paid is drawn up
- Payment datethe cash goes out and lands in your broker account
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Create a free accountEx-dividend date and settlement in the US, UK and EU
Definition
Why isn’t buying on the record date enough?
Because you only become the owner at settlement, one or two business days later.
Settlement is when the shares and the cash actually change hands. The list of who gets the dividend is drawn up on the record date, so what counts is who owns the shares then. With two-day settlement (T+2), the last good day to buy is two business days before, and the ex-date is one day before the record date. With one-day settlement (T+1), the ex-date and the record date are the same day.
| Market | Settlement | Ex-dividend date |
|---|---|---|
| US | T+1 (since 28 May 2024) | Same day as the record date |
| UK (London Stock Exchange) | T+2 (T+1 planned from 11 October 2027) | One business day earlier; usually a Thursday, with the record date on the Friday |
| European Union | T+2 (T+1 from 11 October 2027) | One business day earlier |
| Romania (Bucharest Stock Exchange) | T+2 (T+1 from 11 October 2027), as in the rest of the EU | One business day earlier (ASF Regulation 5/2018) |
Position at 29 October 2026, according to the SEC and NYSE (US), the London Stock Exchange’s 2026 dividend timetable and the UK government, Regulation (EU) 2025/2075 and Romania’s ASF Regulation 5/2018. Once a market moves to T+1, its ex-date rule changes with it.
Why the share price falls on the ex-dividend date
Watch out
Where does the dividend money go?
It leaves the company, so in theory the company is worth that much less.
Up to the ex-date, anyone buying the shares also buys the right to the dividend. From the ex-date the shares trade without it, so the opening price drops, in theory, by the amount of the dividend. In practice the price moves for other reasons too, in both directions. For you, the total stays the same: slightly cheaper shares plus the dividend to come, before tax and dealing costs.
Example with a 20p dividend: £9.80 plus 20p to come is still £10.00.
Lessons are educational. They are not a recommendation to buy or sell. Investing involves risk and you can lose money. Sources: SEC, press release 2023-29 of 15 February 2023 (T+1 settlement, compliance date 28 May 2024); NYSE, rule change on ex-dividend dates for the move to T+1 (SEC Release 34-99871, SR-NYSE-2024-19, 1 April 2024: ex-date on the record date); London Stock Exchange, Dividend Procedure Timetable 2026; HM Government, policy note of 20 November 2025 on mandating T+1 from 11 October 2027; Regulation (EU) No 909/2014 and Regulation (EU) 2025/2075 of 8 October 2025; ASF Regulation 5/2018, art. 2(2)(l); Apple, results release of 30 October 2025 (dividend $0.26, record date 10 November, payable 13 November 2025); Royal Dutch Shell, first quarter 2020 interim dividend announcement (30 April 2020, Form 6-K: ex-dividend 14 May, record date 15 May, payment 22 June 2020).