ETASSUM24720 - Schedule 2 share incentive plan (SIP): Types of award: Dividend shares: Company鈥檚 choices
Where a Schedule 2 SIP provides for dividend reinvestment the company can decide to specify an amount, any such amount determined by the company, which may be up to 100% or any lower amount of the cash dividends received on plan shares held on behalf of participants, which will then be reinvested in more shares on the employees鈥� behalf, (paragraph 62(1)).
The company may modify or revoke the dividend reinvestment arrangement at any time by notifying employees that the terms of their free share and/or partnership share agreement, as appropriate, are modified (paragraph 62(4)).
If an amount of the dividend is reinvested in shares under a plan, the trustees must not issue a voucher for it. There is no tax credit in respect of that amount (Section 493).