Royal Dutch Shell Shares

EveGunn

I hold some RDS B shares in an ISA which used to be managed by BNP Paribas. This has been taken over by a company called Equiniti. All fine, transferred ok. However a divident has just been announced and I've been told instead of the cash from my dividend buying me more B shares, it is buying A shares. Can anyone tell me the difference and whether I should do anything about this? Many thanks.

westy22

I would take this up with Equiniti as if using a DRIP system the shares purchased should be the same designation as the shares that produced the dividend i.e. RDSB shares.

RDSA shares are euro designated and held on the Dutch exchange - any subsequent dividends produced by these shares may be subject to Dutch Witholding Tax which you don't want to happen

grey_gym_sock

AIUI (i don't have RDS shares, but i know somebody who does), they have an unusual SCRIP dividend scheme (not a DRIP) in which you can only get A shares, not B shares. you do have the choice of not joining/leaving the scheme, so that you get cash dividends instead.

the point of the scheme appears to be some kind of tax dodge, related to RDS's dual UK-dutch structure. apparently, because the A shares are dutch shares, you are not regarded as having received any taxable dividend income when you receive them (at least, assuming you are in the UK). instead, you will make a larger capital gain (or smaller loss ) when you eventually sell you RDS shares, because you will have both your original B shares plus some A shares, and the only cost will be the original cost of the B shares. however, this dodge is only particularly beneficial if you are a higher rate tax payer, because basic rate tax payers have nothing extra to pay on UK dividends received.

if you do receive A shares, you can always avoid receiving dividends on them in euros by entering them into the SCRIP dividend scheme, too, which will give you yet more A shares.

however, since you will have with both A and B shares, presumably you will incur 2 dealing charges when you come to sell them.

note: i'm not sure if i have all this right. i did read some documents about it a while ago, and i remember it like this. but take it as a possible answer, and see if you get confirmation/denials of it

westy22

Thanks grey gym sock - I was not aware of this special arrangement. My RDSB are held in a normal Nominee account and therefore my dividends buy more B shares under the DRIP system operated by my broker.

Bryan_Rendall

I too had a BNP Paribas ISA that contained Royal Dutch B shares. When it transferred to Equiniti, the due diligence I did on them was not too favourable (in fact, they seem to get a slating everywhere you look), but I transferred it over anyway in the short term.

Soon after, I started getting hassle from them to complete a direct debit mandate and provide them with all sorts of security information. They said they needed this to collect the management fee from, despite the fact there was always cash in the ISA anyway and thats how the fee had previously been collected.

Due to the "hard sell" on the direct debit demands, and the poor reputation Equiniti has, I elected to cash in the ISA and sold the shares then closed the ISA account - Just before they slid a lot in May which was a lucky bonus!

Since then, Equiniti have continued the assault on my letter box with demands for a completed direct debit mandate. I called them today to tell them to stop sending junk mail. Rather incredulously, they say they cannot close the account as they applied a charge of £15 to it a week after it was allegedly closed. Now they want the direct debit mandate so they can collect that £15!

Understandbly, they were told where to go, but they insisted they will keep the account open and keep sending out direct debit demands, along with adding a further £15 charge to it every month.

I asked to be put through to their complaints department in advance of speaking to the FSA / Ombudsman and the clerk said it wasnt possible to do that - I would have to write a letter or send an email. He did eventually concede to getting complaints to call me back this afternoon. They never did, so it was the Ombudsman who I spoke to instead and they are sending a letter to Equiniti.

All this confirms my suspicions about Equiniti that I should have acted on earlier. (i.e. I should have just cashed in from BNP Paribas and not signed over the transfer)

My suggestion to you then Evegunn would be to think carefully if Equiniti can be trusted with your Royal Dutch shares. I know what my answer would be....

barak

Bryan Rendall - Did you receive the Terms & Conditions applying to the transfer of your ISA from BNP Paribas to Equiniti? Were you offered any alternative? I would have expected a transfer to Equiniti to be just the default.

I think you may find that Equiniti's annual administration charge is payable 6-monthly in advance, which could explain your situation.

You may not like their T&Cs, but to suggest that Equiniti cannot be trusted with an ISA holding Royal Dutch shares - for whom incidentally they are the Company Registrar, as they are for many FTSE100 companies - is a bit far-fetched.

sabretoothtigger

The A shares pay about 20% less cash for whatever reason

Bryan_Rendall

barak wrote: »

I think you may find that Equiniti's annual administration charge is payable 6-monthly in advance, which could explain your situation.

Which makes application of an administration charge in advance, after an account has been closed, all the more bizarre.

barak

Bryan_Rendall wrote: »

Which makes application of an administration charge in advance, after an account has been closed, all the more bizarre.

I haven't seen the T&Cs, but I suspect they are saying that once you have opened an account you will be liable for the first administration charge however soon you close it.

Glen_Clark

Currently has a PE ratio of 6.71 ?
any idea why so cheap?
http://www.google.co.uk/finance?q=LON%3ARDSB&ei=SjimULC_OaeMwAP_Zw

sabretoothtigger

Check the last results given but as usual, different sites give varying PE