Income Tax (Earnings and Pensions) Act 2003 Schedule 2 paragraph 64

Limit on amount reinvested

Paragraph 64 sets out the maximum value of partnership shares that a participant can acquire using dividends reinvested through a Share Incentive Plan (SIP).

• Dividends on plan shares can be reinvested to purchase additional partnership shares, but there is an annual cap on the amount that can be reinvested.
• The maximum amount of dividends that can be reinvested in any tax year is £1,500.
• This limit applies per participant per tax year, regardless of how many separate dividend payments are received during the year.
• Any dividend amounts exceeding the £1,500 annual limit cannot be reinvested through the plan and must be paid out to the participant in the normal way.