Introduction Details of the Schedule Part 6, Share Incentive Plans: Dividend Shares
51.Paragraph 82 introduces amendments to Part 8 of Schedule 2 of ITEPA in relation to SIP 'dividend shares'.
52.Paragraphs 83 - 86 provide that a company may decide what amount of the cash dividends in respect of plan shares is to be reinvested in dividend shares. Companies may apply their own limits for this purpose. This change takes effect from the date the legislation receives Royal Assent, and SIP schemes approved before the change takes effect are to be treated as if relevant provisions included the modifications made by these paragraphs.
53.Paragraphs 87 - 89 remove the £1,500 annual limit on reinvestment of cash dividends in respect of plan shares and make consequential changes. Paragraph 90 removes the three year time limit for reinvestment and makes consequential changes. The changes introduced by paragraphs 87 - 90 apply for the tax year 2013-14 onwards. SIP schemes approved before 6 April 2013 which provide for the reinvestment of dividend shares are treated as if they include the modifications made by these paragraphs.