Commentary on Sections Structure of Chapters Overview Section 406: Later charge where cash dividends retained in SIPs are paid over
1642.This section is based on section 68B of ICTA.
1643.SIP trustees may only retain a cash dividend and carry it forward for three years from the date the dividend is paid by the company. Any amount not reinvested must be paid to the participant if the participant ceases to be in “relevant employment” or if a termination notice is issued in respect of the plan (see paragraph 68(4) of Schedule 2 to ITEPA).
1644.This section makes provision about amounts so paid over.
1645.The definition of “foreign cash dividend” in section 68C of ICTA suggests that it is the date that the company originally paid the dividend that determines whether the tax charge falls under Schedule F or Schedule D Case V in the source legislation. This is rewritten in subsection (5).