Archive for August 4th, 2011

Distributions: Income or capital gains for the shareholder?

August 4, 2011  |  Dividend Taxation  |  No Comments

Preparations for the tea ceremony

A lady tends to the charcoal brazier in preparation for the tea ceremony.

An issue common to many tax systems is whether a distribution made by a company to its shareholders in respect of their shares should be treated as a return of capital to those shareholders or alternatively as an item of income. Shareholder taxation will, of course, often vary dramatically depending on the characterization of such a distribution as an item of income or return of capital. Read More