Unlike most offers, which merely offer shares of the same value as the dividend, the new breed of 'enhanced scrip dividends' give shares worth 150 per cent of the dividend.
The companies making the offer, which include Forte, Redland, RTZ, BAT, Coats Viyella, Ladbroke and BICC, are in effect making a disguised rights issue. Instead of paying out cash, they are creating extra shares.
This makes sense for companies paying too much Advance Corporation Tax - the tax credit on dividends, which is counted as a tax payment on account. If this exceeds their liability they cannot reclaim it.
By persuading shareholders to forgo the cash and take shares instead, they get a boost to their net assets and can cut borrowings.
For instance, if a net dividend of 8p were to be declared, there would be a 2p (20 per cent) tax credit. The new scrip dividend scheme offers shares worth the equivalent of 12p instead.
Michael Read, head of private client investment at the stockbroker Greig Middleton, is strongly recommending clients to take up the offer.
'If clients need the income, then it is still worth taking the scrip dividend and then selling.'
BZW, the merchant banking arm of Barclays Bank that has devised the scheme, is promising to buy back the shares at a 5 per cent discount with no dealing costs. Assuming most brokers will charge a minimum commission of pounds 25, this will be a better deal for those with shareholdings under pounds 14,300 with BAT, pounds 17,000 with RTZ and pounds 18,000 with Coats Viyella.
Mark Summers, marketing executive at the stockbroker James Capel, said the only problem is that the scheme makes computing capital gains tax 'an absolute nightmare'.
'Most fund managers resist scrip dividends where there is no advantage. But where there is a positive advantage we tend to take them up.'
Gavin Brackenbridge, managing director of Allied Provincial Brokers, said clients normally took the cash to save money on accountants' fees.
Helplines are being opened to answer shareholders' inquiries. RTZ; 0500 446 644. Coats Viyella; 0500 635 635. BAT opens Tuesday; 0500 555 125.