Dividends in General
a) Size of dividend is subject to amount profits after tax, plus Reserves available for distribution
b) Dividend may be waived up to 12 months beforehand, but must complete a Deed of Waiver before shareholders approve directors' recommendation. Probably best avoided in light of anti-avoidance legislation, Income Tax (Trading and Other Income) Act (ITTOIA) 2005
c) Final dividends do not appear in Profit & Loss (P&L) Account
d) Proposed dividends do not appear in Balance Sheet (BS) unless approved before BS date at a General meeting, thus becoming a legally binding liability
e) Appear in the Reserves 'Note to the Accounts' for the year in which declared or paid
f) Proposed dividends are not disclosed
g) All dividends will be interim once Companies Act (CA) 2006 brought into effect in October 2008

Interim Dividend
h) Declared & paid by directors
i) Usually declared before Accounts prepared
ii) Dealt with at a properly constituted Board meeting
i) Must issue dividend voucher
j) Must issue minutes of directors' Board meeting to evidence resolution to pay an interim dividend
k) Only creates an enforceable debt when paid
l) May be paid in cash or credited to Directors' Loan Accounts
m) Not legally due until paid or when the appropriate entries are made in company's books
n) If elective resolutions in place to dispense with AGM, only interim dividends may be declared (default once CA 2006 brought into effect)

Final Dividend
o) Proposed by directors
p) Approved by shareholders
i) Usually at AGM after accounts have been laid
ii) or by a members' written resolution
iii) Dealt with at a properly constituted General meeting
q) Must issue dividend voucher
r) Must issue Minutes of both directors and shareholders in General meeting to evidence resolution to pay a final dividend ( or shareholders' written resolution once CA 2006 brought into effect)
s) Legally due when declared i.e. payable immediately unless a future date for payment is specified
May be credited to Directors' Loan Accounts at the date of approval