Tax treatment of Aryzta scrip dividend

noel 2006

Frequent Poster
Messages
52
In 2018 I received a scrip dividend from Aryzta; ie., a dividend in the form of new shares. There was no option to receive a cash dividend. Does anyone know what is the appropriate tax treatment of this scrip dividend?
 

Brendan Burgess

Founder
Messages
37,664
It has no income tax implications.

You had 20 shares which you bought for €100

After the scrip issue , you had 25 shares worth €100

so the cost of the total investment for CGT purposes remains the same.

The only thing you need look out for is if you sell part of your shares.

The cost per share is now €4 instead of €5.

Brendan
 

Brendan Burgess

Founder
Messages
37,664
Are you sure?
Hi jpd

I am not sure as I am not a tax professional. But it is my clear understanding.

I thought that this was just like a share split.

I was a holder of the shares and didn't get any dividend cert.

I have read that Revenue document and it confirms my understanding...


upload_2019-4-26_17-24-29.png
If a company like CRH pays a cash dividend and I opt to take it in shares, that is subject to income tax as normal but that is not what Aryzta did.

Brendan
 

jpd

Frequent Poster
Messages
1,634
There was no dividend for year ending 31 July 2018 according to the Annual report but the 2017 dividend was paid as scrip dividends
No dividend is planned to be proposed for the year ended 31 July 2018.
The dividend for the year ended 31 July 2017 was approved at the Annual General Meeting held on 7 December 2017, to be settled as a scrip dividend via newly issued share capital, based on a ratio of one new share for every 80 shares held. Accordingly, a total of 1,110,253 new shares, with a par value of CHF 0.02 per share, were issued to shareholders holding shares in ARYZTA AG on 29 January 2018, resulting in €33,962,000 being recognised within equity, based on the market price of the shares at the date of approval.
I am not sure that counts as a bonus issue

There was a rights issue and some sort of Hybrid Dividend shares - I don't hold Arzyta so I'm not up to speed on their capital structure and all its changes over the last few years
 

Brendan Burgess

Founder
Messages
37,664
In the CRH case, I get a dividend of €1,000 and I pay tax on that.

If I opt to take it as shares, I still pay tax on it. But I have bought €600 worth of extra shares, so my cost for CGT purposes has risen by €500.

The Aryzta action was like a share split. Nothing changed. except that whereas I had 20 shares worth €100 beforehand, I had 25 shares worth €100 afterwards.

I would be surprised if this gave rise to a tax liability. But I do need to know as I would need it for my tax returns.

Brendan
 
Last edited:

jpd

Frequent Poster
Messages
1,634
For Aryzta, that doesn't seem like the same transaction.

The dividend scrip issue for 2017 was 1 new share for every 80 held whereas you got 1 for 4 so that must have been something else again
 
Top