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Devil in the detail

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02 April 2013

Issue: 4396 / Categories: Forum & Feedback , Companies

A company holds shares in listed companies, unit trusts and open-ended investment companies. Advice is required on the scrip dividends received

My client is a limited company which now exists mainly to hold investments and is operated by two equal shareholders. The only significant assets of the company are investments in listed company shares unit trusts and open-ended investment companies (OEICs).

My query is regarding the treatment of scrip dividends ie bonus shares received by the company in respect of certain listed shareholdings.

It would appear to be the case looking at the Capital Gains Manual CG58790 and at CTA 2010 s 1049 that any bonus shares or scrip dividends received by the company on quoted shareholdings are not subject to tax in the company. This is because dividend income received by this small company would appear to be exempt from corporation tax.

In addition it would appear that such bonus shares are treated as acquired for no consideration so that ...

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Devil in the detail

© Copyright LexisNexis 2024. All rights reserved.

02 April 2013

A company holds shares in listed companies, unit trusts and open-ended investment companies. Advice is required on the scrip dividends received

My client is a limited company which now exists mainly to hold investments and is operated by two equal shareholders. The only significant assets of the company are investments in listed company shares unit trusts and open-ended investment companies (OEICs).

My query is regarding the treatment of scrip dividends ie bonus shares received by the company in respect of certain listed shareholdings.

It would appear to be the case looking at the Capital Gains Manual CG58790 and at CTA 2010 s 1049 that any bonus shares or scrip dividends received by the company on quoted shareholdings are not subject to tax in the company. This is because dividend income received by this small company would appear to be exempt from corporation tax.

In addition it would appear that such bonus shares are treated as acquired for no consideration so that ...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

Issue:

4396

Categories: Forum & Feedback [1] , Companies [2]

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