Scrip Dividend Singapore — What It Is and How It Works

Scrip dividend is a form of dividend payment where shareholders receive new shares instead of — or as an alternative to — cash. In Singapore, scrip dividends (also called scrip dividend schemes or dividend reinvestment plans) are offered by SGX-listed companies including several S-REITs, allowing investors to compound their holdings without incurring brokerage fees. This article is for informational purposes only and does not constitute financial advice.

How Scrip Dividend Works

When a company announces a scrip dividend, eligible shareholders receive a notice offering them a choice: take the dividend in cash, or elect to receive new shares at a specified price (usually at a small discount of 2–5% to the recent market price). If you own 10,000 units of a REIT and the DPU is S$0.02/unit, your total dividend is S$200. Under a scrip scheme at a 3% discount, you’d receive approximately 198–205 additional units instead of the S$200 cash.

The new shares are issued from the company’s share issuance mandate — this is why scrip dividends are mildly dilutive to existing unitholders who choose cash, as the total unit count increases for those who elected scrip. However, for scrip-electing investors, their proportional ownership increases slightly.

Scrip Dividends in Singapore REITs

Several major S-REITs have offered scrip dividend schemes at various points. Notable examples include Mapletree Logistics Trust, CapitaLand Integrated Commercial Trust (CICT), and Keppel DC REIT — though availability varies by distribution period and management discretion. During COVID-19 (2020–2021), many REITs activated scrip schemes to conserve cash while still rewarding unitholders.

As at Q1 2026, with SORA near trough (~1.07%) and REIT prices recovering, fewer REITs are actively offering scrip as they prefer to pay full cash distributions. Always check the REIT manager’s distribution announcement on SGX to confirm whether a scrip option is available for any given quarter. The best S-REITs with consistently strong DPU typically pay full cash.

Pros and Cons of Scrip Dividend

Benefits:

• Zero brokerage cost compounding: You receive additional units without paying the usual 0.06–0.18% SGX brokerage fee — significant for small portfolios.
• Automatic reinvestment: Ideal for passive investors who want to grow their holding without active management.
• Slight discount to market: Units are typically issued at 2–5% below the prevailing market price, giving scrip-electors a modest pricing advantage.
• No market timing required: Unlike dividend reinvestment via open-market purchases, scrip removes the need to time your re-entry.

Drawbacks:

• Cash flow reduction: If you rely on REIT distributions for income (e.g., in retirement), electing scrip means less cash in hand. Our retirement planning calculator can help you model income needs.
• Dilution for cash-takers: Total unit count rises when others elect scrip, diluting the per-unit DPU of cash recipients slightly over time.
• Odd lot risk: Scrip allocations may result in fractional lots that are difficult to sell on the open market, as SGX trades in standard lots of 100 units.
• Uncertain pricing: The scrip price is set at a specific date — if the market falls sharply after election, you may have been better off taking cash and buying cheaper.

Tax Treatment in Singapore

Singapore has no dividend tax and no capital gains tax for individual investors. Scrip dividends received by Singapore resident individuals are therefore received tax-free (same as cash dividends). The new shares received do not trigger income tax at the time of receipt. This makes Singapore a particularly scrip-friendly jurisdiction — there is no immediate tax cost to electing scrip, unlike jurisdictions such as the UK or Australia where scrip elections can create taxable events.

For SRS account holders, reinvesting via scrip within SRS is allowed and does not trigger early withdrawal penalties. For CPF OA investors holding CPFIS-eligible REITs, scrip elections may require specific broker handling — check with your broker. See our CPF investment strategy guide for more.

Scrip Dividend vs Dividend Reinvestment Plan (DRP)

In Singapore, scrip dividend and DRP (Dividend Reinvestment Plan) are often used interchangeably, but they differ slightly in structure. A scrip dividend issues new shares from the company’s authorised share capital. A DRP (as used by some trusts) may use market-purchased shares or treasury shares. The economic effect is similar, but the mechanics and dilution implications differ. Check the specific scheme documentation from the REIT manager for clarification. See our DRP glossary entry for a detailed comparison.

How to Participate in a Scrip Dividend in Singapore

When a scrip dividend is offered, you’ll receive notification through your broker (CDP-linked account holders) or via the REIT’s SGX announcement. You typically have a 2–3 week election window to opt in. Steps:

• Log into your broker platform (FSMOne, DBS Vickers, moomoo, etc.) and look for the corporate actions section
• Select the relevant scrip dividend election and confirm your choice
• Ensure you hold the units on the record date — scrip elections are not possible after the XD (ex-dividend) date
• New units are credited to your CDP account approximately 4–6 weeks after the distribution announcement

If you do not make an election, most schemes default to cash payment. Double-check the default election terms in the specific announcement.