- Latest available (Revised)
- Point in Time (06/04/2003)
- Original (As enacted)
Version Superseded: 17/07/2013
Point in time view as at 06/04/2003.
Income Tax (Earnings and Pensions) Act 2003,
Part 8
is up to date with all changes known to be in force on or before 26 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
62(1)A SIP may provide that, where the company so directs, the trustees must apply all cash dividends in respect of plan shares held on behalf of—U.K.
(a)all participants, or
(b)all participants who elect to reinvest their dividends,
in acquiring further shares on their behalf.
(2)Sub-paragraph (1) is subject to paragraph 63 (requirements to be met as regards cash dividends).
(3)In the SIP code—
(a)the application of cash dividends as mentioned in sub-paragraph (1) is referred to as “reinvestment”; and
(b)the further plan shares acquired are referred to as “ ”.
(4)The company may revoke a direction requiring the reinvestment of cash dividends.
(5)References in the SIP code to the trustees acquiring dividend shares on behalf of a participant include their appropriating to a participant shares already held by them.
63(1)If a SIP makes the provision authorised by paragraph 62(1) (reinvestment of cash dividends), the following paragraphs apply—U.K.
paragraph 64 (limit on amount reinvested),
paragraph 65 (general requirements as to dividend shares),
paragraph 66 (acquisition of dividend shares),
paragraph 67 (holding period for dividend shares), and
paragraph 68 (reinvestment: amounts to be carried forward).
(2)The plan must meet any plan requirements contained in those paragraphs.
(3)A SIP must in any event meet the plan requirement contained in paragraph 69 (cash dividends not required to be reinvested).
64(1)The plan must provide that the total dividend reinvestment in respect of a participant must not exceed £1,500 in a tax year.U.K.
(2)For this purpose “the total dividend reinvestment” in respect of a participant is the sum of—
(a)the amount applied by the trustees in acquiring dividend shares on behalf of the participant under the plan, and
(b)the amount applied in acquiring dividend shares on behalf of the participant by the trustees of other approved SIPs that are established by the company or an associated company.
(3)If the amounts received by the trustees exceed the limit in sub-paragraph (1), the plan must provide for the balance to be paid over to the participant as soon as practicable.
65U.K.The plan must provide that dividend shares are to be shares—
(a)which are in the same company and of the same class, and carry the same rights, as the shares in respect of which the dividend is paid, and
(b)which are not subject to any provision for forfeiture.
66(1)The plan must provide that the trustees must treat participants fairly and equally in exercising their powers in relation to the acquisition of dividend shares.U.K.
(2)The plan must provide for the trustees to acquire dividend shares on behalf of participants on the acquisition date.
(3)The number of dividend shares acquired on behalf of each participant must be determined in accordance with the market value of the shares on the acquisition date.
(4)In this paragraph “the acquisition date” means the date set by the trustees for the acquisition of dividend shares and falling not later than 30 days after the dividend is received by them.
67U.K.Paragraphs 36 and 37 (the holding period and related matters) apply in relation to dividend shares as they apply in relation to free shares, except that the holding period must be 3 years.
68(1)This paragraph applies where an amount is not reinvested—U.K.
(a)because the amount of the cash dividend to which the participant is entitled is not sufficient to acquire a share, or
(b)because there is an amount remaining after acquiring one or more dividend shares on the participant’s behalf.
(2)The amount may be retained by the trustees and carried forward to be added to the amount of the next cash dividend to be reinvested.
(3)If so retained, the trustees must hold the amount so as to be separately identifiable for the purposes of sub-paragraphs (4) and (5).
(4)An amount retained under this paragraph must be paid over to the participant—
(a)if or to the extent that it is not reinvested within the period of 3 years beginning with the date on which the dividend was paid, or
(b)if during that period the participant ceases to be in relevant employment (see paragraph 95), or
(c)if during that period a plan termination notice is issued in respect of the plan (see paragraph 90).
(5)An amount required to be paid over to the participant under sub-paragraph (4) must be paid over as soon as practicable.
(6)For the purposes of this paragraph an amount carried forward under this paragraph derived from an earlier cash dividend is to be treated as reinvested before an amount derived from a later cash dividend.
69(1)The plan must require any distributable cash dividends in respect of plan shares held on behalf of a participant to be paid over to the participant as soon as practicable.U.K.
(2)“Distributable cash dividends” means cash dividends which are not required to be reinvested under the plan.
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: