Definition of "Dividends"

A distribution of a companies profits to shareholders. Dividends are normally not liable to basic rate tax for the recipient on the basis that they have met their liability under corporation tax. However a recipient who is a higher rate tax payer is liable to the difference in tax due. This is only a guide and we cannot confirm positively what tax would actually be due you should always consult an accountant before making any decision that could create a tax liability. Dividends are not guaranteed and companies do not have to declare a dividend is due.

A distribution of the earnings of a corporation paid to the common and preferred stockholders. An amount that is returned to the policyowner by the insurance company on participating policies. The policy dividend from an insurance company is not considered a taxable distribution by the IRS, but as a refund of a portion of the premium paid.