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CD 19: Foreign tax credits and refunds linked to dividends
or “Tax credits and refunds from overseas dividends can increase your dividend amount”
You could also call this:

“Rules for non-cash benefits given to employees who own shares or are directors”

If you work for a company and also own shares in it, the company might give you benefits that aren’t cash. These benefits can sometimes be called dividends. Here’s how it works:

If the company gives you a benefit that isn’t classified in a specific way, and you own shares in the company, the company can choose to call this benefit a dividend. They do this by following a rule in another part of the law.

If you’re a director of the company but don’t work there day-to-day, and you own shares, any non-cash benefit the company gives you is always called a dividend. This is true even if you only got the benefit because you’re a director.

For other cases where you both work for the company and own shares, a non-cash benefit isn’t a dividend if it’s considered a fringe benefit under one part of the law, and another part of the law says it can’t be a dividend.

When we say “non-executive director”, we mean someone whose only job for the company is to formally be a director and follow the rules that come with that role.

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Next up: CD 21: Attributed repatriations from controlled foreign companies

or “Money from overseas companies you control is no longer taxed in this way”
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Part C Income
Income from equity

CD 20Benefits of shareholder-employees or directors

  1. A non-cash benefit provided by a company to an employee is a dividend if—

  2. the benefit is an unclassified benefit; and
    1. the employee is a shareholder in the company; and
      1. the company chooses, under section CX 17(2) (Benefits provided to employees who are shareholders or investors), to treat the benefit as a dividend.

        1. A non-cash benefit provided by a company to a non-executive director of the company is a dividend if the director is a shareholder in the company, even if the benefit is provided solely because the director is a non-executive director.

        2. In any other case of a non-cash benefit provided by a company to a person who is both an employee and a shareholder, the benefit is not a dividend if—

        3. the application of section CX 17(2) means it is a fringe benefit; and
          1. section CD 32 accordingly excludes it from being a dividend.

            1. In this section, non-executive director means a person whose only services to the company as an employee are the formal occupation of the role of director and compliance with the associated statutory obligations.

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