Income Tax (Trading and Other Income) Act 2005 section 409

Charge to tax on stock dividend income

Section 409 establishes that income tax is charged on stock dividend income and provides a definition of that term.

• Income tax is charged on stock dividend income — that is, where a shareholder receives additional shares instead of a cash dividend
• Stock dividend income is specifically defined as income treated as arising under section 410 of the same Act
• This section is the gateway charging provision for the stock dividends chapter of the legislation
• The rules originated from section 249 of the former Income and Corporation Taxes Act 1988