149. Charge to income tax on stock dividend income.

Income tax is charged on the amount of stock dividends ('stock dividend income') treated for income tax purposes as arising in the tax year1. Stock dividend income is treated as arising on the earliest date on which the company is required to issue the stock dividend in question2.

If an individual is beneficially entitled to the stock dividend, income is treated as arising to him and he is the person liable for the tax3.

If the stock dividend is issued to trustees in respect of shares they hold in the company (alone or with others), and a cash dividend paid to