Section 1051 “Bonus share capital” and “in lieu of a cash dividend”

(1)

In sections 1049 and 1050 “bonus share capital” means—

(a)

share capital issued otherwise than wholly for new consideration, or

(b)

the part (if there is such a part) of any share capital so issued that is not properly referable to new consideration.

(2)

For the purposes of section 1049(1)(a) share capital is issued by a company in lieu of a cash dividend if—

(a)

it is issued in consequence of the exercise by a person of an option conferred on the person, and

(b)

that option is an option to receive, in respect of shares in the company, either a dividend in cash or additional share capital.

(3)

For the purposes of subsection (2), an option to receive either a dividend in cash or additional share capital is conferred on a person not only—

(a)

if the person is required to choose one or the other, but also

(b)

if the person is offered the one subject to a right, however expressed, to choose the other instead.

(4)

The reference in subsection (2) to a person's exercise of an option includes a person's abandonment of, or failure to exercise, a right such as is mentioned in subsection (3)(b).

Notes on Part 23

Modifications

C1: Pt. 23 applied (with modifications) by 2003 c. 1, s. 554AC(3) (as inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 2)