Scrip dividend definition

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Key UK tax considerations for returning value to shareholders—comparative table

Key UK tax considerations for returning value to shareholders—comparative table The table below sets out different methods by which a company can return value to shareholders and summarises the key UK tax considerations relevant to each structure. In all cases, it is assumed that: • the company returning value is UK incorporated and tax resident • if the shareholder is a company, the shareholder is UK resident • if the shareholder is an individual, the individual has not claimed the remittance basis of taxation for periods prior to 6 April 2025 and is not taxed pursuant to the foreign income and gains regime, the temporary repatriation facility or other post-6 April 2025 transitional rules (for which see, Practice Notes: The abolition of the remittance basis of taxation from 2025–26, Foreign income and gains regime from 6 April 2025 and Temporary repatriation facility—FAQs) • the shareholder does not hold shares in the company as a nominee or trustee for any other person, and • the shareholder holds the shares as an...

Notice of general meeting or annual general meeting—checklist

Notice of general meeting or annual general meeting—checklist Who is entitled to receive notice of general meeting or annual general meeting? Notice of the general meeting (GM) or annual general meeting (AGM) must be sent to: • every member of the company, ie those appearing on the register of members (including those entitled to a share in consequence of the death or bankruptcy of a member, if the company has been notified of their entitlement) • every director of the company, and • the company’s auditors Check the company’s articles in particular for provisions relating to: • giving notices to joint, untraceable or overseas shareholders, and • cut-off dates by which time a member needs to be registered on the register of members to receive a notice. Where a company's shares are held in CREST, a member must be registered in the register of members at least 21 days before the date the notice is sent Form of notice Notice of a GM must be given: • in hard copy...

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Dividends—the legal framework

A company has an implied power to distribute its profits to its members, unless its articles of association provide otherwise.A dividend is one type of distribution that may be made by a company to its members. In fact, dividends are the most common type of distribution made by a company.The provisions of Part 23 of the Companies Act 2006 (CA 2006) and the common law rules relating to distributions (as modified by those provisions) must be complied with if a company is to make a lawful distribution. For consideration of the law and practice relating to distributions made by a company, see Practice Note: Distributions. For information on the consequences of non-compliance with the law on distributions, see Practice Note: Unlawful distributions.This Practice Note focuses on the law and practice that generally applies to the payment of dividends, which is not an issue that is dealt with in CA 2006, Pt 23. For details of the additional rules and guidance that specifically apply to dividends paid by listed companies and...

Scrip dividends

A company has an implied power to distribute its profits to its members, unless its articles of association provide otherwise.A dividend is one type of distribution that may be made by a company to its members. In fact, dividends are the most common type of distribution made by a company.The provisions of Part 23 of the Companies Act 2006 (CA 2006) and the common law rules relating to distributions (as modified by those provisions) must be complied with if a company is to make a lawful distribution. For consideration of the law and practice relating to distributions made by a company, see Practice Note: Distributions. For information on the consequences of non-compliance with the law on distributions, see Practice Note: Unlawful distributions.The ordinary meaning of 'dividend' is a share of profits, whether at a fixed rate or otherwise, allocated to the holders of shares in a company. It is used in relation to payments made to shareholders as shareholders and not, eg, by way of remuneration for services.A dividend is...

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Phantom share award plan rules

Phantom share award plan rules RULES OF THE [insert name of company] PHANTOM SHARE AWARD PLAN Adopted by the Board on [insert date] 1 Definitions In these Rules (unless the context otherwise requires) the following words and phrases have the following meanings: Award • means an award of Units granted to a Participant, subject to the terms of the Plan and the Award Agreement; Award Agreement • means the agreement referred to in Rule 3.5 entered into between the Company and an Eligible Employee; Award Date • means the date on which the Board grants an Award in accordance with the rules of the Plan; Award Payment • means in respect of each Unit subject to an Award, a cash payment equal to the difference between the Base Value and the Exit Value; Base Value • is the Market Value of a Share as at the Award Date or such other value as determined by the Board on the Award Date; Board •...