Income Tax (Trading and Other Income) Act 2005 section 411

Income charged

Section 411 establishes the amount on which income tax is charged when a shareholder receives stock dividends (shares instead of cash dividends) from a UK resident company.

• Income tax is charged on stock dividend income that is treated as arising in the tax year
• The taxable amount is the cash equivalent of the share capital issued when the stock dividend arises
• The cash equivalent is calculated in accordance with section 412
• The charge applies to stock dividends from UK resident companies