# Corporation Tax Act 2010, 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).

---
Source: https://www.legislation.gov.uk/ukpga/2010/4/section/1051 (the official version)
Page: https://openlegislation.uk/corporation-tax-act-2010/section-1051
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.