Tax on special dividend from Plc

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denby11

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I’m currently invested in Uk company which has been going through a takeover process. Recently it indicated to market instead of a full takeover it is in negotiations sell substantially al it’s assets with a view to continuing in business afterwards as as scaled down business. It would pay a “SPECIAL DIVIDEND” to share holders of this sale is completed.How is this special divided treated from a tax perspective as opposed to a full takeover?
Thanks
 
The treatment will depend on how it is structured... purely by mention of a special dividend, it would seem that this will be treated as income tax, rather than a return of capital (CGT). The company is likely to advise in its FAQ how it will be treated by Inland Revenue. I know the likes of Ryanair previously arranged things in that the shareholder was able to elect to receive the funds as a capital or income event, but this hasn't been the norm.
 
Did Paddy Power not do something similar a few years ago where you either got a divident but depending on how you treated it could have been taxed either way
 
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