Employee Tax Advantaged Share Scheme User Manual

ETASSUM24710 - Schedule 2 share incentive plan (SIP): Types of award: Dividend shares: Introduction

When a company declares a dividend on a class of shares that includes plan shares, the dividend will be paid to the registered (or legal) owner of those plan shares. Normally, it is the trustees of a Schedule 2 SIP that will receive the dividend on plan shares but plan shares are sometimes registered in the name of a nominee. In either case, the recipient will be obliged to apportion the dividend between the beneficial owners of the shares (including Schedule 2 SIP participants) and distribute it accordingly.

A Schedule 2 SIP must require any distributable cash dividends to be paid over to the participant as soon as practicable (paragraph 69). This requirement is subject to the exception that the Schedule 2 SIP may provide for cash dividends to be used by the trustees to acquire further plan shares on behalf of participants. In the SIP Code this process is known as 바카라 사이트渞einvestment바카라 사이트� and the shares so acquired are referred to as 바카라 사이트渄ividend shares바카라 사이트� (paragraph 62(3)).

(The Schedule 2 SIP trustees are also under a more general obligation to pay over to participants any money or money바카라 사이트檚 worth they receive in respect of participants바카라 사이트� shares but this is considered in relation to the trustees바카라 사이트� obligations at ETASSUM26000).