Part 8 Cash Dividends and Dividend Shares
Income Tax (Earnings and Pensions) Act 2003 (2003 c 1) | Legislation

Part 8 Cash Dividends and Dividend Shares

Reinvestment of cash dividends

62

(1)     A SIP may provide that, where the company so directs, the trustees must apply [some or all of the] cash dividends in respect of plan shares held on behalf of—

(a)     all participants, or

(b)     all participants who elect to reinvest their dividends,

in acquiring further shares on their behalf.

[(1A)     The company's direction must set out—

(a)     the amount of the cash dividends to be applied as mentioned in sub-paragraph (1), or

(b)     how that amount is to be determined.]

(2)     Sub-paragraph (1) is subject to paragraph 63 (requirements to be met as regards cash dividends).

(3)     In the SIP code—

(a)     the application of cash dividends as mentioned in sub-paragraph (1) is referred to as “reinvestment”; and

(b)     the further plan shares acquired are referred to as “dividend shares”.

(4)     The company may [modify or] revoke a direction requiring the reinvestment of cash dividends.

(5)     References in the SIP code to the trustees acquiring dividend shares

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