Building life‑changing passive income starts with one simple idea: owning companies that can grow their dividends year after year.

And if you hold those shares in a Stocks and Shares ISA, all that income and any capital gains are shielded from UK tax, so every pound of growth works only for you.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

But which two UK shares might give you the best chance of achieving that?

Yield isn’t everything

The yield represents how much is paid out per share, but it shouldn’t be the core focus for income investors. Rather, focus on how reliable and sustainable the dividend growth is – this is the cornerstone of any serious income plan. 

Based on long, double‑digit dividend growth records, strong reinvestment economics and current expectations, two standout candidates are Diploma (LSE: DPLM) and Spirax Group (LSE: SPX).

Both have long histories of growing their payouts and operate in specialist areas where they can keep reinvesting at attractive returns.

Diploma

Diploma’s a specialist distributor supplying mission‑critical components and services into areas like industrial controls, seals and life sciences.

These are not glamorous markets, but they tend to be sticky. Once a customer relies on you to keep their factories or labs running, they are slow to switch.

Some key numbers investors might like are:

• Shares up 820% in 10 years.
• Forty-one‑year unbroken dividend track record.
• Cash flow covers dividends by 3.37 times.
• Earnings growth of 43% year‑on‑year.

Put simply, profits are growing fast, and the dividend is well covered by cash. That gives the board room to keep increasing the payout while still funding acquisitions and organic growth. 

The risk though, is that the market may have priced in future growth. After such a strong recent rally, the valuation is asking a lot. Any unexpected earnings decline (or a bad acquisition) could hurt the share price — even if the long‑term appeal remains.

Spirax

Spirax Group lives in a different but equally specialist world. It provides steam and thermal energy solutions and related technologies to factories across the globe.

Think of it as helping industry move heat around more efficiently and reliably, which is a big deal as companies try to cut emissions and energy waste.

Here are some headline figures:

• Forty-six‑year unbroken dividend track record.
• Cash flow covers dividends by 2.3 times.
• Strong balance sheet: only £1bn in debt vs £2.66bn in assets.

Like Diploma, it also faces valuation risk. Trading on a price‑to‑earnings (P/E) ratio of 32.6, it’s high for an industrial business — even a good one. If earnings disappoint, or growth slows for a couple of years, the share price could fall sharply as investors look for alternative options.

A focused ISA strategy

A Stocks and Shares ISA lets you collect every penny of returns from your investments, with no worry about capital gains tax along the way. For long‑term investors, that tax shelter can make a huge difference, especially when you reinvest the dividends so the pot compounds exponentially.

So instead of chasing whatever hot stock offers a high yield today, I prefer to focus on steady, consistent dividend growth.

Diploma and Spirax both have long records of growing their payouts and they operate in niches with room to keep doing so. That’s why I think they’re well worth considering for a long‑term ISA income strategy.