Income Tax (Trading and Other Income) Act 2005 section 405

SIP shares: introduction

Section 405 introduces the special rules about income tax charges on dividends from shares held in a Share Incentive Plan (SIP).

• Sections 406 to 408 set out special tax rules for dividends on shares awarded under a Schedule 2 Share Incentive Plan
• These rules only apply where the individual was chargeable to income tax on employment earnings at the time the shares were awarded
• Section 405 and sections 406 to 408 form part of the wider SIP code established by section 488 of ITEPA 2003
• Key terms such as "award of shares", "dividend shares", "participant" and "plan shares" take their meanings from the index in Schedule 2 to ITEPA 2003