Paying dividend by means of promissory note

Can a UK company pay dividends to its shareholders by means of a promissory note in Bitcoin? 

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Can a UK company pay dividends to its shareholders by means of a promissory note in Bitcoin? 

Meaning it will create a debt from the company to the shareholder nominated in BTC. 

Am I correct in my understanding that if it's allowed, the amount of such dividend will be the market value of the sum in Bitcoin on the date promissory note was issued?

Provided it's difficult to give an independence evidence of the fact, will any special treatment be required, or can this instrument cause any problems with HMRC? 

Thanks in advance!

Replies (3)

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By johngroganjga
20th Jul 2018 04:37

First and foremost all the shareholders will have to agree unanimously to accept their dividend in this form. If there is any reluctance or refusal I think the company will have to abandon the plan.

Yes the value of the dividend for accounting and tax purposes will be the value of the notes at the point of issue.

But why make things complicated? Why not pay the shareholders in cash and let them invest in bitcoin if they want? Will the company be hedging its risk? If not, why not?

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Replying to johngroganjga:
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By Tax Dragon
20th Jul 2018 09:48

Quote:

Yes the value of the dividend for accounting and tax purposes will be the value of the notes at the point of issue.


Just to highlight for the OP that the value of the notes John refers to is the market value, which not the same thing as the face value (per your question).

But forget that point: I'm not sure this idea even gets close to working.

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By WhichTyler
20th Jul 2018 08:17

Quote:

Can a UK company pay dividends to its shareholders by means of a promissory note in Bitcoin? 

this seems to be a way of not paying a dividend, whatever currency the iou is denominated in

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