A plan under which shareholders can elect to receive shares instead of receiving a cash dividend. Once the shareholders elect to take shares, the company's registrars arrange for the shares to be purchased in the market. It is customary for brokers' costs and stamp duty or stamp duty reserve tax to be met by the shareholders by deducting these amounts from the dividend payment before the shares are purchased.

For the tax treatment of DRIPs, see Practice note, Scrip dividends and dividend reinvestment plans: tax: Taxation of DRIPs.