Income Tax (Trading and Other Income) Act 2005 section 410

When stock dividend income arises

Section 410 explains when stock dividend income is treated as arising, to whom it arises, and which types of share capital issued by UK resident companies fall within these rules.

• The section covers two types of share capital from UK resident companies: shares issued instead of a cash dividend, and bonus shares issued in respect of shares of a qualifying class
• Stock dividend income is treated as arising to the individual beneficially entitled, to trustees where a cash dividend would have been accumulated or discretionary income, or to personal representatives during the administration period of an estate
• The income is treated as arising on the earliest date the company is required to issue the share capital, with apportionment rules applying where more than one person is entitled
• Special transitional rules apply to share capital issued in respect of shares originally issued before 6 April 1975