Stock Dividends

Jul 13, 2011 2 Replies
T

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


Vote
Twitter Facebook LinkedIn
D

formatting link
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.

Vote
Twitter Facebook LinkedIn
T

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

Vote
Twitter Facebook LinkedIn

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required