Where a shareholder A has signed a dividend waiving his right to all future dividends, should future minutes
and EGMs declaring dividends simply carry on declaring £X per share as before without reference to the waiver?
Should a dividend voucher be prepared for the waived dividend? I am sure the answer must be no, but you never know!
rjd
Replies (4)
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Dividends on successive days
Ken,
With the £10k in distributable profits, why not
On day one, pay a dividend of £10k, £5k is waived, £5k is paid then,
On day two pay a £5k dividend, £2.5k is waived, £2.5k is paid then,
On day three, pay a £2.5K dividend £1.25k is waived and £1.25k is paid, etc.
Does the inland revenue regard the waived part of a dividend (which forms part of the profit and loss account) frozen for ever (or maybe a period of time) so that it can never be paid as a dividend but is paid on a liquidation, and then to whom? Or can a later dividend make use of it? Would this involve a further tax return entry?
waiveng bye bye to your dividend
To make sure that you don't have an issue with HMIT, I would ensure that the meeting minutes refer to
1) paying a dividend of £x, after allowing for the dividend waiver.
2) noting that the dividend waiver was in place and that no notice revoking the waiver had been received by the time of the meeting.
Otherwise you might find that HMIT expect to see the amount voted split by the number of shares in issue - and therefore a smaller amount of cash is available to be paid to the shareholder who hasn't waived the dividend rights! ie dividend voted of £100 on the 100 shares in issue. Amount paid is £50 as 50% shareholder has waived dividend rights.
As far as I am aware no dividend voucher is required - as no dividend is payable because of the waiver.
Incidentally, the waiver must have been executed as a deed before the meeting to propose the dividends.
Jonathan