Kay Corp. yesterday announced plans to spin off its subsidiary, Kay Jewelers Inc., giving its stockholders shares of both Kay Corp. and Kay Jewelers.

Kay Corp., which is based in Alexandria, owns about 80 percent of Kay Jewelers' stock. The company said that, pending a decision from the Internal Revenue Service on the tax implications, it plans to issue about one share of Kay Jewelers stock for every share of Kay Corp. stock outstanding.

That would make Kay Jewelers, the nation's third-largest specialty jewelry retailer, a completely independent company, no longer part of Kay Corp., which also consists of an international commodities trading business.

After the spinoff, Kay Jewelers will remain in Alexandria, said Murray Ackerman, Kay Corp. vice president. The headquarters of the commodities business will probably be moved to New York, he predicted.

Kay officials said that company has planned for some time to spin off the jewelry chain, which consists of Kay Jewelers, Black Starr & Frost, and Marcus & Co., which operates jewelry departments in departments stores.

Among other things, they have noted, Kay's other business -- involving speculative and risky commodities operations -- has deterred the public from investing in Kay Corp. and has kept financiers from offering favorable financing to the jewelry division.

The spinoff was first signaled last year when Kay Corp. sold about 20 percent of Kay Jewelers stock to the public for the first time. The stock, issued in May at a price of $11.50, closed yesterday at $16.50. Accounting for the recent 5-to-4 stock split, the $16.50 price is equivalent to about $21, representing nearly an 80 percent increase in the price of the stock in less than one year.

"Even though Kay Jewelers now has its own listing, it is still 80 percent controlled by us," Ackerman said. "Many investors still don't view that favorably," especially considering there are so few shares -- about a million -- that can be publicly traded, he said.

Also, Ackerman said, "Kay Jewelers is highly dependent on outside financing. A lot of lenders would do more favorable borrowing for Kay Jewelers if we Kay Corp. weren't sitting there with 80 percent of the stock. They worry about the pitfalls of the commodities business. Independent, Kay Jewelers could raise capital under better terms and conditions."

At the same time, financial analysts said, the spinoff will greatly benefit Kay Corp. shareholders. "They will be in an enviable position," said Eliot H. Benson, an analyst with Ferris & Co. Inc. "They will end up receiving shares in a subsidiary of Kay Corp., which has an opportunity to show some interesting growth over time."

Charles T. Akre Jr., of Johnston, Lemon & Co., added: "This is the most beneficial thing that could happen to Kay Corp. stockholders. Kay Corp. could have sold the jewelry company," without such direct benefit to the shareholders, he said.

Kay Corp. stock rose $1.25 to close at $22 a share yesterday.

Kay officials said the company needed IRS approval that the spinoff would impose no extra taxes on shareholders or the company. "That could take six months, it could take two years," said Michael R. Lavington, Kay Jewelers' president. But company officials hoped approval would come before the end of the year.

If the IRS fails to grant the tax-free status, then "we'll have to go back to square one," Lavington said.

In 1985, Kay Corp. earned $10.8 million on revenue of $666.3 million. On its pre-tax operating profits of $50.4 million, Kay Jewelers contributed about half -- $24 million.