Shares instead of dividends

ognum

I have some shares (Shell) and have had a letter suggesting that the dividends are taken as shares rather than in cash.

I currently am not in need of the dividends to live on, I inherited the shares, the dividends payable are better than money in the bank.

What are the tax implications of this please?

CLAPTON

they simply use your dividend to buy shares
so the dividend counts as dividend income in the normal way for tax purposes and you pay tax accordingly (or none if standard rate payer)

chrismac1

Various surveye have shown that the one single reason share ownership beat property returns and bond returns during the 20th Century was the reinvestment of dividends. It's something I've always done personally.