Tax implications of ceded dividend rights

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The favourable tax treatment of dividends makes it susceptible to be used as a mechanism to disguise other income in a manner to also enjoy this treatment. The KWJ case deals with an instrument that provided the taxpayer with a yield in the form of antecedent dividend rights. Specifically, the judgment considered the timing and nature of the accrual to the taxpayer in such a case. Click here for the full article.