Whats going on with Vodafone shares?

harriko

Hi, I am a small share holder in this company and a beginner in the the stock market. There is some news about vodafones existing shares being exchanged for ordinary shares and "B" shares. can someone explain this to me? thanks.

Chrismaths

Vodafone has finally realised that trying to conquer the world isn't going to work, so they have sold their Japanese unit and is returning the cash to shareholders. The shareholder will have 2 main options for taking the money - You can either receive it as a dividend (subject to income tax) or as a B share (which you can sell as capital).

If you have capital gains less than the the £8,800 exemption this year, then selling the B share immediately on receipt (which you can opt to do for free at the time of issue) is the most tax efficient way to take the money. If you have already used your CGT exemption, then taking a dividend will be more efficient. Or you can hold on to the B share and wait until next tax year to sell if you are unlikely to realise significant gains next year. Essentially, it's down to you to work out what is most tax efficient for you, and make the election when you receive the documentation.

harriko

1 Elect to have your "B" shares redeemed immediately.

2 Elect to receive a single dividend per "B" share.

3 Elect to retain your "B" shares with the right to redeem on certain dates in the future.

I have three options to choose from. I was wondering if I kept "B" shares will it go up in value in about a years time?

Chrismaths

No, they will not change in value. The only reason to keep hold of them is for tax purposes.