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HMRC internal manual

Repayment Claims Manual

RO instructions: Stock Dividends

Stock Dividends first appeared in 1993. It is important to recognise them.

They are dividends taken in the form of shares instead of cash. The vouchers issued are similar to normal dividend vouchers but do not show a tax credit. They refer to `shares issued’ and `notional tax’.

Although they are treated as income to which a normal company dividend tax credit attaches, that credit is income tax treated as paid. It is not repayable and cannot be used to cover charges (RE124).

Note that from April 2016 the Personal Savings Allowance and Dividend Tax Allowance apply and repayments are not usually appropriate.