Stocks and shares: listed stocks, shares and investments: other issues: dividends
X-dividends are essentially dividends that are declared but not yet paid at the date of valuation.
A listed company usually pays a dividend on its shares twice a year. The value of the dividend is announced some weeks before it is actually paid. In the intervening period,
- the value of the shares does not reflect the additional dividend, but
- its quotation on SEDOL (IHTM18092) is endorsed “XD” (x-dividend) to reflect it.
The value of the dividend is then usually provided separately on SEDOL in pence per share (except for Unit Trust funds (IHTM18095)).
- If the deceased/transferor held “XD” shares, the right to receive the dividends is an asset of the chargeable estate (IHTM04043). Ensure that the dividends are included at their full quotation value.
- If Service advise that any dividends are omitted, raise the addition with the taxpayer, subject to de minimis limits (IHTM18042).