Dividends & Stocks

Dividend glossary (UK companies)

Short, plain-English definitions for the terms that come up on our pages about UK-listed, dividend-paying companies such as the FTSE 100.

Dividend

A cash payment a company makes to its shareholders, usually out of profit, decided by its board of directors.

Ex-dividend date

The cut-off date: you need to hold the share before this date to receive the upcoming dividend. Buying on or after it means the seller, not you, gets that payment.

Record date

The date the company checks its shareholder register to work out who is entitled to the dividend, usually shortly after the ex-dividend date.

Payment date

The date the dividend cash actually reaches shareholders, typically some weeks after the record date.

Dividend yield

A company's annual dividend per share divided by its share price, shown as a percentage — a rough measure of income return, not total return.

Withholding tax on dividends

Tax deducted at source before a dividend reaches the shareholder. Most UK companies do not withhold tax on dividends paid to shareholders — this is general context, not tax advice.

FTSE 100

An index of the 100 largest companies listed on the London Stock Exchange by market value.

Blue-chip company

A large, well-established, financially sound company — the term has no official definition, but is commonly used for companies like most FTSE 100 members.