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Income Tax (Earnings and Pensions) Act 2003

Paragraph 62: Reinvestment of cash dividends

3137.This paragraph sets out propositions that are of central importance for this Part of this Schedule. A SIP may provide that, where the company so directs, the trustees must apply all cash dividends in respect of plan shares in acquiring further plan shares on behalf of participants. This application of cash dividends is referred to as “reinvestment” in the SIP code, and the further plan shares acquired are referred to as “dividend shares”.

3138.Sub-paragraphs (1) to (4) of this paragraph derive from sub-paragraphs (1), (2) and (4) of paragraph 53 of Schedule 8; and sub-paragraph (5) derives from paragraph 56(5) of that Schedule. (Paragraph 53(3) of Schedule 8 is the source for paragraph 69 in this Schedule.).

3139.Sub-paragraph (1) contains a reference to “the trustees”, so permitting the use of a verb in the active, and not the passive, voice; and sub-paragraph (4) contains additional concluding words to make its meaning easier to grasp.

3140.Sub-paragraph (5) consists of a proposition placed considerably earlier than in the corresponding Part of Schedule 8, in the interests of user-friendliness.

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