What is a scrip issue?

A scrip issue is when a company’s reserve of cash is converted into shares and distributed to its existing shareholders. For example, a company that pays scrip dividends is Barclays Bank. A scrip issue can be a way of making new shares, which are given to shareholders free of charge.

Where have you heard about scrip dividends?

If you are an investor in a company and you receive a dividend in scrip form, you would then be the recipient of a scrip dividend and this would normally be given to you in the place of a paying dividend.

What you need to know about companies paying scrip dividends.

An investor has the right to sell their scrip share on the market at any time. However, they must report the value of the scrip dividend as the same as that of a cash dividend when it comes to filing their tax return. This is a list of companies who pay scrip dividends:

• ACS
• Banco Santander
• Barclays
• BP
• ComputerShare
• HSBC
• Iberdrola
• National Grid
• Pennon Group
• Rolls Royce
• South Side Bank Share
• Royal Dutch Shell

Find out more about companies paying scrip dividends.

You can find out more by taking a look at our page on scrip dividends.