What is specie dividend?
A dividend in specie refers to distribution to shareholders in a form other than cash. A refund can now be claimed for a dividend in specie.
What does a distribution in specie mean?
in its actual from
In specie is a Latin phrase which means ‘in its actual from’. A distribution in specie is therefore, a distribution of an asset in its present form, rather than a distribution of the proceeds of sale of the asset.
What does transfer in specie mean?
Transferring an asset ‘in specie’ means to transfer the ownership of that asset from one person/company/entity to another person/company/entity in its current form, that is without the need to convert the asset to cash. In specie transfers involve a transfer of assets between two pension schemes.
What does it mean to be paid in specie?
The phrase in specie describes the transfer of an asset in its current form rather than in the equivalent amount of cash. In specie distributions are usually made when cash isn’t readily available or when it’s simply more practical to hand over the asset rather than cash.
Is dividend in specie taxable?
In specie dividends are subject to tax in the hands of the company and not the beneficial owner. Foreign dividends received by or accrued to an SA-resident taxpayer are included in income based on a formula and taxed at the normal CIT rate, which results in an effective tax rate of 20%.
Is a share buy back a dividend in specie?
Generally, the interest associated with the raising of debt to finance a share buy-back will not be deductible in the hands of the company. Apart from offering cash to its shareholders, a company may also distribute an asset in specie to its shareholders in return for the shareholders giving up their shares.
What does specie mean in legal terms?
In specie is a Latin term that means “in its actual form.” It is sometimes used to indicate that distribution of an asset will be in its actual form, rather than transferring it into cash or another form.
How do you account for a distribution in specie?
Measuring an in-specie distribution The accounting entry will normally be: DR – Retained reserves; CR – Asset account (at carrying/book value). A company can, therefore, make a legitimate distribution provided the distribution amount does not exceed its distributable profits.
How do I transfer in specie?
An in-specie transfer is the process of transferring assets without selling the underlying investment. This process is often used in transferring managed funds or shares. ‘In-specie’ is a Latin phrase meaning ‘in its actual form. ‘ Therefore, a transfer made ‘in-specie’ is a transfer of an asset in its present form.
How long does an in specie transfer take?
In-specie transfers typically take up to 6 weeks to complete. You can also opt for a ‘mixed’ transfer, which means we transfer some of your balance across in-specie and the rest as cash.
Is a dividend in specie taxable?
Where a company makes an in-specie distribution – in effect makes a dividend consisting of an asset, the actual market value of that asset is generally treated as a taxable distribution in the hands of an individual shareholder.