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Corporate Actions - A Concise Guide: An introduction to securities events by Francis Groves

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9. Corporate Actions and Taxation

Corporate actions often result in tax liabilities for investors, chiefly for Income Tax arising from dividends, or for Capital Gains Tax (CGT) arising from alterations to the investors’ shareholding; for example in a takeover or a rights issue. Stamp Duties (or Stamp Duty Reserve Tax – SDRT) and withholding taxes may also result from issuers’ corporate action policies. In the case of the level of Corporation Tax payable, which shareholders may view as an indirect tax on themselves, corporate actions have no impact. However, companies based in countries such as the Republic of Ireland, where corporation tax is levied at 12.5%, may have more after-tax profits with which to pay dividends. [83]

Stamp Taxes ...

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