Commentary

E1.420 Stock dividends from UK resident companies

Personal and employment tax

E1.420 Stock dividends from UK resident companies

Stock dividends from UK resident companies

E1.420 Stock dividends from UK resident companies

Stock dividend income is charged to tax as savings and investment income1. For full commentary on the taxation of stock dividends in the hands of a non-corporate recipient, see D6.243, D6.244.

A 'stock dividend'2 is an issue of shares by a company resident in the UK made:

  1.  

    •     because a shareholder has exercised an option to take additional share capital as an alternative to a cash dividend (note, a shareholder is treated as exercising an option not only where he makes a positive choice but also where

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