Income Tax (Earnings and Pensions) Act 2003

Reinvestment: amounts to be carried forward

68 (1) This paragraph applies where an amount is not reinvested—

(a) because the amount of the cash dividend to which the participant is entitled is not sufficient to acquire a share, or

(b) because there is an amount remaining after acquiring one or more dividend shares on the participant’s behalf.

(2) The amount may be retained by the trustees and carried forward to be added to the amount of the next cash dividend to be reinvested.

(3) If so retained, the trustees must hold the amount so as to be separately identifiable for the purposes of sub-paragraphs (4) and (5).

(4) An amount retained under this paragraph must be paid over to the participant—

(a) if or to the extent that it is not reinvested within the period of 3 years beginning with the date on which the dividend was paid, or

(b) if during that period the participant ceases to be in relevant employment (see paragraph 95), or

(c) if during that period a plan termination notice is issued in respect of the plan (see paragraph 90).

(5) An amount required to be paid over to the participant under sub-paragraph (4) must be paid over as soon as practicable.

(6) For the purposes of this paragraph an amount carried forward under this paragraph derived from an earlier cash dividend is to be treated as reinvested before an amount derived from a later cash dividend.