Part 4

Savings and investment income
Chapter 5

Stock dividends from UK resident companies

Cash equivalent of share capital
412
1
The cash equivalent of share capital within section 249(1)(a) of ICTA (an issue in lieu of cash dividend) is the amount of the cash dividend alternative.
2
But if the difference between the cash dividend alternative and the share capital’s market value equals or exceeds 15% of that market value—
a
subsection (1) does not apply, and
b
the cash equivalent of the share capital is its market value.
3
The cash equivalent of share capital within section 249(1)(b) of ICTA (bonus share capital) is its market value.
4
For the purposes of this section, market value is determined—
a
in the case of listed share capital, on the date of first dealing, and
b
in the case of other share capital, on the earliest date on which the company is required to issue it.
5
In this section—
- “listed” means listed in the Stock Exchange Daily Official List, and
- “market value” has the same meaning as in sections 272(1) and (3) and 273(3) of TCGA 1992.