Revenue Note for Guidance

The content shown on this page is a Note for Guidance produced by the Irish Revenue Commissioners. To view the section of legislation to which the Note for Guidance applies, click the link below:

Revenue Note for Guidance

816 Taxation of shares issued in place of cash dividends


This section sets out the tax treatment of dividends on shares (scrip dividends) issued in place of cash dividends, at the option of the shareholder.


(1) A number of self-explanatory definitions are set out.

(2) When a shareholder in a company receives a scrip dividend, an amount equal to the amount that he or she would have received if he or she had opted to receive a cash dividend in place of the scrip dividend is treated in the following way —

  • if the company is resident outside the State, the shareholder is taxed on the amount as income under Case III of Schedule D;
  • if the company is a resident quoted company, the amount is treated as a distribution made by the company;
  • if the company is resident in the State and not quoted, the amount is taxed under Case IV of Schedule D.

(3) By applying section 152, an Irish resident quoted company issuing a scrip dividend must furnish the recipient with a statement in writing showing the amount that is treated as a distribution, the period to which it relates and, in the case of scrip dividends issued before 6 April 1999, the tax credit attaching to the distribution.

(4) Scrip dividends, whether received under a deliberate exercise of an option or otherwise, are also covered by this section.

Relevant Date: Finance Act 2021