Special dividends & CGT

Special dividends & CGT

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What is the impact (if any) of special dividends on CGT base cost?

As an example Standard life recently sold its Canadian subsidiary and returned value to shareholders.  Shareholders had a choiice of value being returened as capital or as income through a special dividend.  Where the special dividend option is chosen is there any impact on base cost?

I am aware of value shifting/depreciatory transaction rules for intra group distributions, but is there anything similar that restricts base cost when a quoted company pays a special dividend to its (Joe Public) shareholders? 

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By User deleted
25th May 2015 15:53

Yes there will be an impact on base cost

I suggest that you read up on how the special dividend was paid - I suspect that B and C shares were involved (the scope of such arrangements now limited as a result of blocking legislation).

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By kiwilondon99
26th May 2015 16:06

yes base cost can change


review the Std Life prospectus and tax notes for an overview on the imnplications specific to Std Life.  Some of the base cost is removed by the creation of the B share and transfer of base cost to it.  See the company website as it may contain the factors needed

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