D6.243 Stock Dividends—Non-Corporate Recipient—Charge To Income Tax

Home / Simons-Taxes /Corporate tax /Part D6 Company reconstruction and profit extraction /Division D6.2 Reorganisation of share capital /Issue of share capital / D6.243 Stock dividends—non-corporate recipient—charge to income tax

Commentary

Corporate tax

Overview of tax rules on stock dividends

A stock dividend is not taxed as a distribution¹, but is instead taxed as 'non-qualifying income' when calculating a person's income tax liability.

If more than one person is entitled to the share capital giving rise to the stock dividend, the following rules apply to each of them as if the company had issued to each a proportionate part of the stock dividend. The proportion is taken by reference to their respective interests at the earliest date on which the company has to issue the stock dividend².

Charge to tax

Stock dividend income is charged to tax as savings and investment income³. It is treated as arising on the

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