Divended payout
hello newbie here. like to check when there is issuance of dividend it can be in the form of cash or scrip. what does scrip mean?
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Will73 : When companies issue SCRIP dividends, it means they are giving investors the option to receive additional shares instead of a cash dividend.
SCRIP dividends are exempt from stamp duty and dealing charges and means the company can keep cash within the business. Investors may be able to receive a tax benefit, if the capital gain by selling the SCRIP dividend in the market falls below the annual tax-free allowance for capital gains.
The SCRIP dividends usually relate to newly created shares rather than pre-existing ones. They are taxed in the same way as cash dividends and should be stated when completing your Self Assessment tax return.
ShanesuOP Will73: Thank you for the kind explanation .