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Stock Dividends

Can anyone please help me clarify the following?

  1. Scrip dividends.

I understand if I elect to receive scrip dividends directly from a company I do not have to declare them as income. However, if I hold my shares in a nominee account, and I ask my broker to reinvest my cash dividends into shares every time they are paid, can I regard them as scrip dividends too (and not declare them as income)?

  1. Share dividends.

If a company decides to pay all its dividends in shares, does it effectively become a share split? If I sell the share dividends, how do I calculate their costs? Do I use zero, or the diluted price of all my shares?

Thanks in advance!

TG

Reply to
tg
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I haven't had them for a few years, but I believe they are no longer on the basic self assessment form, so you will need some additional pages.

Reply to
David Woolley

Thank you very much David for your reply and link. I was under the impression that stock dividends might not be taxable because in the tax return guide I received, it says not to include them in the normal Income section of the tax return (where cash dividends would go), but in Additional Information instead (which I thought is for information only). Meanwhile for foreign income, it says exclude stock dividends when declaring dividends from foreign companies. Seems a bit unfair to pay tax on them if the share price subsequently falls.

Cheers, TG

Reply to
tg

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